October BLS.

Inside the BLS Employment Situation Report

For several years I have been writing this numerically detailed analysis of the BLS Employment Situation Report. I remain massively frustrated at the absolutely poor mainstream reporting of the jobs 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 +161,000 (E). Revisions to the two previous months added 44,000 making the total increase (seasonally adjusted) since the last report 205,000.

Not seasonally adjusted data was +899,000.

– the size of the civilian noninstitutional adult population increased by 230,000 to 254,321,000 (H).

– 4195,000 fewer 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). Year/year Labor Force was +2,616,000.

With a labor participation rate of 62.8% 144,400 more jobs were necessary to keep pace with population growth. With the adjustments for the previous 2 months we had 61,000 more population-adjusted jobs.

The Labor Participation Rate fell from 62.9% to 62.8%. It was 62.5% 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 205,000. This accounts for the changes for the 2 previous months.
– the Unemployment Rate was rose from 5.0% to 4.9%. It was 5.0% a year ago.(B)
– Average hourly earnings was $25.92 up from the previous month’s $25.82. (E)
– Average work week was the same . (E)
– Private jobs were +142,000 (without adjustments for previous 2 months). Government jobs were +19,000. (E).

– Good producing jobs were unchanged. The two previous months were revised to -26,000 and +14,000 (E).
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was 62.8%. It was 62.5% 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 3,749,000 down 218,000 from previous month’s Job Losers and down 195,000 year-on-year. (H)

– Job leavers was 949,000. This includes anyone who retired or voluntarily left working. This is up 56,000 from previous month and up 159,000 year-on-year. (H)

-Reentrants was 2,354,000. Reentrants are previously employed people who were looking for a job and found one. This was +21,000 from the previous month and -81,000 year-on-year.(H)

-New entrants were 793,000. These are people who never worked before and who are entering the labor force for the first time. This was -12,000 from previous month and -19,000 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 down 5,000 at 5,889,000.
Professional and Business added 43,000. Health care and Social Services added 31,000..
Average hours worked for men was 41.0 hours/week. Average hours worked for women was 35.7. That is a 15% difference and remains the largest source of the gender pay gap.

Note that BLS measure jobs not people working. If you go to FRED at the St. Louis Fed you can see that the number of multiple job holders is October was 8,050,000 up from 7,846,000 in September. If those numbers are accurate the it is the case that the number of people working actually declined. The BLS Establishment survey counts jobs not people working. The entire increase in the headline is due not to more people working but to more people holding more than one job.

Thus far in 2016, employment growth has averaged 181,000 per month, compared with an average monthly increase of 229,000 in 2015.

The media hype that this report was good is deceptive. 1) Most of the gain could be offset by population growth 2) There were more people working 2 jobs which explains the entire nominal gain 3) monthly jobs growth is year is 21% less that last year.