THE BASIS POINT

BLS: Better but not Great.

 

Inside the BLS Employment Situation Report

This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which includes the 12th of the month.

Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.

– Nominal Nonfarm jobs was +280,000 (E). The two previous months’ gains were revised to +221,000 and +119,000 they had been 223,000 and 85,000. That is a gain of 37,000 for those 2 months from the previous report making a net gain of +312,000 in jobs since the last report.

– the size of the civilian noninstitutional adult population increased by 189,000 to 250,455,000 (H).

– 397,000 more people were in the labor force last month. These are people who are now working or, at least, state that they are looking for jobs (H)

With a labor participation rate of 62.9% 118,900 more jobs were necessary to keep pace with population growth. With the adjustments for the previous 2 months we had 193,100 more population-adjusted jobs added than that. (H) The Employment/Population ratio was steady at 59.3%

The Labor Participation Rate rose from 62.8% to 62.9%. It was 62.8% a year ago. It peaked at 67.3% in April 2000.

– Nominal job growth last month was 312,000. This accounts for the changes for the 2 previous months.
– the Unemployment Rate rose to 5.5%. It was 6.3% a year ago.(B)
– Average hourly earnings was $24.96 up from $24.88 the previous month. (E)
– Average work week was 34.5 the same as the previous month. (E)
– Private jobs were +213,000. Government jobs were 10,000. (E)

– Good producing jobs were +6,000. The two previous months were revised to +21,000 and +20,000 (E)
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) rose from 62.8% to 62.9%. It was 62.8% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention. It is this 62.9% of the adult noninstitutionalized population who get pay checks and contribute to GDP.
Last month BLS measured 4 sets of people entering or leaving the jobs market:
– Job losers and persons who completed temporary jobs was 4,267,000 up 131,000 from previous month’s Job Losers and down 692,000 year-on-year. (H)

– Job leavers was 829,000. This includes anyone who retired or voluntarily left working. This is up 1,000 from previous month and down 43,000 year-on-year. (H)

-Reentrants was 2,615,000. Reentrants are previously employed people who were looking for a job and found one. This was -70,000 from the previous month and +254,000 year-on-year.(H)

-New entrants were 971,000. These are people who never worked before and who are entering the labor force for the first time. This was +103,000 from previous month and -92,000 year-on-year.

One line in the BLS Report is termed “people employed part-time for economic reasons.” These are people who want to work full time but their employer, for whatever reason, decide to employ them only part-time. In this month’s report there were 72,000 more people working part-time for economic reasons.
The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 312,000 more people are working.

– 397,000 more people are in the civilian labor force.

The unemployment rate was up.
This report is certainly better than the previous. We are clearly past the worst time for jobs but jobs growth is still less than impressive. Also, jobs growth is concentrated in relatively low paying jobs which do not generate many second order jobs. This report is better than recent ones but is still displaying the disconnect between jobs and GDP.

 

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