THE BASIS POINT

Inside May’s BLS Jobs Report

 

This is my monthly look inside the BLS Employment Situation Report. Keep in mind that there ate two BLS Surveys: the Establishment Survey and the Household Survey. The 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. The Household Survey is a survey of households taken each month during the week which included the 12th of the month. It is a survey of 60,000 households.

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

– Headline Nonfarm jobs was +69,000. (E) This was after revising April from +115,000 to +77,000.
– Unemployment Rate was 8.2% in compared to 8.1% in April 2012 (B)
– Average hourly earnings was $23.41 up from $23.39 in April 2012 (E)
– Average work week was 34.7 hours the same as April 2012 (E)
– Private jobs were +82,000. Government jobs were -13,000 (E)

Reading beneath the surface:

-Good producing jobs were -15,000. The 3 previous months were +4,000, +38,000, and +20,000. (E)

-The size of the civilian labor force increased from 154,365,000 to 155,007,000 an increase of 642,000. This large increase helps explain why the Unemployment Rate went up. (H)

-The labor participation rate (percent of adult non-institutionalized population who are part of the labor force) rose to 63.8% from 63.6%. It was 64.2% a year ago. This, not the unemployment rate, is the number which should get everyone’s attention. Some of this is structural and some is cyclical. (H)

– the size of the civilian noninstitutional population rose by 182,000 in March. With a labor participation rate of 63.8% 116,000 more jobs were necessary to keep pace with population growth. We had 47,000 fewer jobs added than that. (H)

According to the 4 week moving average of Initial Jobless Claims 1,498,000 people lost their jobs in the last 4 weeks. That normalizes to 1,622,600 lost jobs in a calendar month (there are about 13 4 week periods in a 12 month year.) This is up from the previous month’s 1,567,500 lost jobs/month.

If 1,622,600 people lost their jobs last month and we gained 69000 jobs, how did that happen? The answers are in the Household Survey.

In April 2012 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 6,989,000 up 137,000 from May’s Job Losers and down 1,261,000 from May 2011. (H)

-Job leavers was 891,000. This includes anyone who retired or voluntarily left working. This was down 106,000 from previous month and down 28,000 from May 2011.(H)

-Reentrants was 3,439,000. Reentrants are people who were looking for a job a found one. This was +98,000 from previous month and +3,000 from May 2011.(H)

-New entrants were 1,367,000. These are unemployed persons who never worked before and who are entering the labor force for the first time. This was -17,000 from previous month and +138,000 from May 2011.

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

– 69,000 more people are working

– 643,000 more people are in the civilian labor force

– 137,000 more people lost their jobs

– 106,000 fewer people left their jobs

– 98,000 more reentrants obtained jobs.

The fact that 643,000 more people declared themselves as part of the labor force is the most encouraging part of the report. The fact that the increase in jobs was insufficient to cover the number needed to keep pace with population growth was the most discouraging item.

This is the 3rd consecutive weak jobs report. Coupled with the very weak GDP revision Thursday, it paints a very bleak landscape considering that we are so far into a recovery which featured massive deficits and extraordinarily accommodative monetary policy.
___
Related:
What May’s Jobs Report Did To Rates (CHARTS)

 

READ OUR NEWSLETTER

YOUR COMPETITORS ALREADY DO

Comments [ 2 ]
  1. Greatest Blogs And Websites says:
    June 9, 2012 at 10:40 am

    The job situation today poses a interesting question for those on both the left and the right. Why is it or how can it be that companies in the standard and poors five hundred are seeing their earnings soar while at the same we are seeing such animic job creation by the private sector. The answer technology. Labor saving technology and also the increasing ability of many companies to move not just physical production overseas but also white collar jobs overseas. What we have here is a very serious dilemma on the one hand increasing productivty can keep prices down their by keeping inflation in check. But theirs a problem in our economic system. If a company is profitable and productive they could use their increasing productivity to improve both wages and benefits of their employees and they could also use their increasing productivity to lower prices or at least not raise prices. On the other hand they could use their growing excess profits which are directly related to their increasing efficiency and productivity to buy back their stock pay a larger dividend and do acquisitions or just hold the cash on their balace sheet. Rather than increase and improve the wages and benefits of their empolyees and lower or hold prices of their products and services steady. I believe the vast majority of the businesses in the united states have chosen to do the latter. In order to expect companies to pass on their excess profits in the form of lower prices or stable prices  we must see increased competition among firms in the same business. This is often absent. Look at the huge money center banks that have a hold on huge regions of the country. With fewer competitors these companies can keep much of their excess profits instead of being forced to pass them along to consumers.. Another factor that is at work here is the tremendous amount of competition for jobs in the labor market as long as unempolyment remains high many companies are not inclined to increase wages and improve benefits. In the end we have a growing mismatch between the ability of the average consumer to afford the products and services being provided to the consumer by business.

    Reply
  2. Greatest Blogs And Websites says:
    June 9, 2012 at 10:40 am

    The job situation today poses a interesting question for those on both the left and the right. Why is it or how can it be that companies in the standard and poors five hundred are seeing their earnings soar while at the same we are seeing such animic job creation by the private sector. The answer technology. Labor saving technology and also the increasing ability of many companies to move not just physical production overseas but also white collar jobs overseas. What we have here is a very serious dilemma on the one hand increasing productivty can keep prices down their by keeping inflation in check. But theirs a problem in our economic system. If a company is profitable and productive they could use their increasing productivity to improve both wages and benefits of their employees and they could also use their increasing productivity to lower prices or at least not raise prices. On the other hand they could use their growing excess profits which are directly related to their increasing efficiency and productivity to buy back their stock pay a larger dividend and do acquisitions or just hold the cash on their balace sheet. Rather than increase and improve the wages and benefits of their empolyees and lower or hold prices of their products and services steady. I believe the vast majority of the businesses in the united states have chosen to do the latter. In order to expect companies to pass on their excess profits in the form of lower prices or stable prices  we must see increased competition among firms in the same business. This is often absent. Look at the huge money center banks that have a hold on huge regions of the country. With fewer competitors these companies can keep much of their excess profits instead of being forced to pass them along to consumers.. Another factor that is at work here is the tremendous amount of competition for jobs in the labor market as long as unempolyment remains high many companies are not inclined to increase wages and improve benefits. In the end we have a growing mismatch between the ability of the average consumer to afford the products and services being provided to the consumer by business.

    Reply

WHAT DID WE MISS? COMMENT BELOW.

All comments reviewed before publishing.

nineteen − eighteen =

x