THE BASIS POINT

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, seasonally adjusted, was +255,000 (E). Revisions to the two previous months added 18,000 making the total increase (seasonally adjusted) since the last report 273,000.

Not seasonally adjusted data was -1,030,000. The previous July was -943,000 not seasonally adjusted.

– the size of the civilian noninstitutional adult population increased by 223,000 to 253,620,000 (H).

– 407,000 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) This is encouraging. Year/year Labor Force was +2,172,000.

With a labor participation rate of 62.8% 140,040 more jobs were necessary to keep pace with population growth. With the adjustments for the previous 2 months we had 132,260 more population-adjusted jobs added than that.

The Labor Participation Rate rose from 62.7% to 62.8%. It was 62.6% a year ago. It peaked at 67.3% in April 2000. While much of the downward trend in Participation Rate is demographic (aging population) the underlying fact is that this smaller participating percentage is going to have to carry the economy and generate tax revenue to pay for the increasing cost of Social Security and Medicare.

– Nominal job growth last month was 273,000. This accounts for the changes for the 2 previous months.
– the Unemployment Rate was flat at 4.9% from 4.7%%. It was 5.3% a year ago.(B)
– Average hourly earnings was $25.69 up from the previous month’s $25.61. (E)
– Average work week was 34.5 hours up from 34.4. (E)
– Private jobs were +217,000 (without adjustments for previous 2 months). Government jobs were +38,000. (E).

– Good producing jobs were +16,000. The two previous months were revised to -41,000 and -+5,000 (E).
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) rose from 62.7% to 62.8%. It was 62.6% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention. It is this 62.8% 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 3,739,000 down 37,000 from previous month’s Job Losers and down 377,000 year-on-year. (H)

– Job leavers was 824,000. This includes anyone who retired or voluntarily left working. This is up 30,000 from previous month and down 20,000 year-on-year. (H)

-Reentrants was 2,298,000. Reentrants are previously employed people who were looking for a job and found one. This was 59,000 from the previous month and -143,000 year-on-year.(H)

-New entrants were 826,000. These are people who never worked before and who are entering the labor force for the first time. This was -76,000 from previous month and -1,000 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 this figure was up 97,000 at 5,940,000. This was after a large drop in June.
Professional and Business added 70,000. Leisure and Hospitality added 45,000. Food Services and Drinking added 21,000. Health care and Social Services added 43,000. Health care has added 477,000 jobs in the past year.
Average hours worked for men was 40.9 hours/week. Average hours worked for women was 36.1. This remains the largest source of the gender pay gap. http://www.bls.gov/web/empsit/cpseea27.htm

This report is the second consecutive positive report.

 

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