Inside the July BLS Jobs Report

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 +162,000. (E). The two previous months’ gains were revised to +188,000 (June) and +176,000 (May). Those had been +195,000 (June) and +195,000 (May.) That is a loss (for June and May of 26,000 from the previous report making the net gain of 136,000 in jobs since the last report.

– the size of the civilian noninstitutional adult population increased by 204,000 in July to 245,756,000 (H). With a labor participation rate of 63.5% 129,300 more jobs were necessary to keep pace with population growth. We had 32,700 more jobs added than that including the changes from April and March. (H) The Employment/Population ratio was flat at 58.7%.

The Labor Participation Rate fell from 63.5% to 63.4%. It was 63.7% a year ago.

The civilian noninstitutional population is 2,402,000 (H) more than 12 months ago. With a labor participation rate of 63.4% we require 1,523,000 more jobs in the past 12 months to keep pace with population growth. We had 2,035,000 (H) more folks working. The increase in real (population adjusted) jobs in the past year is 512,000. This datum looks better than otherwise because the labor participation rate declined.

– Real (population adjusted) job growth in July was 32,700. This accounts for the changes for May and June.

– the Unemployment Rate was 7.398% down from 7.557% in June 2013(B).

– Average hourly earnings was $23.98 down from $24.00 in June 2013 (E)

– Average work week was 34.4 hours down from 34.5 hours June 2013 (E) –

Private jobs were +161,000. Government jobs were +1,000 (E)

-Good producing jobs were +4,000. The two previous months were revised to +8,000 and -4,000 (E)

-The size of the civilian labor force fell from 155,835,000 to 155,798,000 a decrease 37,000. (H) This drop in the Labor Force contributed to the fall in the Unemployment Rate.

-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was 63.4.% down from 63.5%. It was 63.7% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention. It is this 63.4% of the adult noninstitutionalized population who get pay checks and contribute to GDP.


According to the 4 week moving average of Initial Jobless Claims, 1,364,000 people lost their jobs in the last 4 weeks. That normalizes to 1,478,000 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is down from the previous month’s 1,498,500 jobs lost/month.

In July 2013 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 5,921,000 down 198,000 from previous month’s Job Losers and down 1,185,000 from July 2012. (H)

– Job leavers was 979,000. This includes anyone who retired or voluntarily left working. This down 51,000 from previous month and up 100,000 from July 2012. (H)

-Reentrants was 3,258,000. Reentrants are previously employed people who were looking for a job and found one. This was -33,000 from the previous month and -116,000 from July 2012.(H)

-New entrants were 1,254,000. These are people who never worked before and who are entering the labor force for the first time. This was -5,000 from previous month and -45,000 from July 2012.

Part-time vs. Full-Time

In my newsletter of 2 weeks ago I mentioned that more attention should be paid to the full-time vs. part-time numbers in the BLS Report. What we should look at is 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 19,000 of the +162,000 jobs were part-time. Of the +162,000 jobs retail was +47,000 and food and beverage was +38,000.

The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 162,000 more people are working 85,000 of those 162,000 are in retail or food and beverage. Both the length of the work week and the average hourly wage fell.

– 37,000 fewer people are in the civilian labor force.

The unemployment rate decreased 0.166%. We are +512,000 real (population adjusted) jobs for the past 12 months. This is not what a recovery looks like.

The economy is failing to produce jobs for people entering the labor force for the first time. We still have underlying serious issues with the jobs market. These issues are structural not cyclical. While the trend to part-time in no so evident this month as last month the fact is that more than half of the +162,000 jobs were either retail (+47,000) or food and beverage was (38,000.) Those are not the jobs which enable home buying or the purchase of a new car. Jobs are important to the extent that they create social stability but low paying jobs add minimal stimulus to GDP as they provide nothing more than subsistence. After-tax incomes are lower than they were in November 2012.

The U.S. economy is no longer producing jobs for folks who do not have a college degree or recognized trade skills. Jobs performed by those without education or skills are either being automated or offshored. The very large increases in the cost of college education are making education less affordable as it becomes more necessary. The jobs being added are low paying jobs.