BLS

July Jobs Report Spooks Stock Market

August 3, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for July on August 2^nd,2024.

Employment / Unemployment

Seasonally Adjusted U3- 4.3% up from 4.1% in June
Unadjusted U3- 4.5% up from 4.3% in June
Unadjusted U6- 8.2% up from 7.7% in June
Labor Force Participation Rate 62.7% up from 62.6%
Employment 158.445 million down from 159.360 million
Next data release September 6^th, 2024

Summary:
Total Employed decreased in July, adjusted and Unadjusted Unemployment was up.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“The unemployment rate rose to 4.3 percent in July, and nonfarm payroll employment edged up by 114,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, in construction, and in transportation and warehousing, while information lost jobs.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 159.392 million for June
which they then adjusted to 159.360 million in August.

They are currently reporting 158.445 million jobs for July which is actually a decrease of 947,000 jobs based on their original numbers. The LFPR was up at 62.7% but the Employment/Population Ratio was down from 60.1% to 60.0%.

Bad News for the Market?

On Wednesday (prior to the Jobs data release on Friday) the stock market reacted bullishly to FED Chairman Powell’s dovish speech with anticipation of a September rate cut. But then markets reversed course on Thursday on preliminary Employment numbers. But what they failed to recognize is that the worst months (highest unemployment) are usually January, June, and July. So a bad July doesn’t really signify much.

Adding to the market’s woes, Intel dropped a bombshell with its earnings report. The company announced plans to slash jobs and suspend dividends after missing earnings targets and delivering a disappointing sales forecast. Intel shares cratered over 25% in early trading, dragging other chip stocks down with it.

In other news, Israel is suspected of killing a Hamas leader inside Iran. So now the market also fears retaliation by Iran causing a war in the Middle East. In addition to these political problems, Japan is creating financial problems for the U.S. by raising interest rates while other countries are lowering them. As you can see from the chart below, Japan has had zero or near-zero interest rates for almost 30 years. For a brief stretch, their rates got all the way up to 3/4 of 1%! (Horror of Horrors). But since 2008 they have been below 1/3rd of 1%.

This has created what is called the “Carry Trade” where people could borrow Yen almost interest-free and invest that money in higher-yielding things like Nvidia or other NASDAQ stocks or even lower-risk things like U.S. Treasury Bills. However, with the Bank of Japan (BOJ) raising rates, the free money is drying up, which creates selling pressure on the NASDAQ.

The NYSE was down -1.79% on Friday after being down -1.16% on Thursday.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment remains above the pre-COVID 2019 cyclical lows of 3.5%, but is approaching the yellow zone.

June Employment Weak

July 6, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for June on July 5^th,2024.

Employment / Unemployment

Seasonally Adjusted U3- 4.1% up from 4.0% in May
Unadjusted U3- 4.3% up from 3.7% in May
Unadjusted U6- 7.7% up from 7.1% in May
Labor Force Participation Rate 62.6% up from 62.5%
Employment 159.392 million up from 158.845 million
Next data release August 2^nd, 2024

Summary:
Total Employed increased in June, Unadjusted Unemployment was up sharply, but Seasonally adjusted Unemployment increased only slightly.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment increased by 206,000 in June, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in government, health care, social assistance, and construction…

Both the unemployment rate, at 4.1 percent, and the number of unemployed people, at 6.8 million, changed little in June. These measures are higher than a year earlier, when the jobless rate was 3.6 percent and the number of unemployed people was 6.0 million.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 158.918 million for May
which they now adjusted to 158.845 million.

They are currently reporting 159.392 million jobs for June which is actually an increase of 474,000 jobs compare to what they first reported or 547,000 compared to their new numbers.

The LFPR was up from 62.5% to 62.6%.

Good News for the Market?

In the perverse stock market of these post-pandemic days, the market is looking for an excuse for the FED to cut interest rates so “Bad News is Good News” for the market.

The news wasn’t bad enough to spark a major rally but after falling initially, at around 10:30 AM the market turned around and rallied for the rest of the day taking it to slightly above the previous day’s close. So basically a giant “nothing burger”.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment remains above the pre-COVID 2019 cyclical lows of 3.5%, but is approaching the yellow zone.

[Read more…] about June Employment Weak

May 2024 Employment- Good News is Bad News?

June 8, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for May on June 7^th,2024.

Employment / Unemployment

Seasonally Adjusted U-3 was 4.0% up from 3.9% in April
Unadjusted U-3 was 3.7% up from 3.5% in April
Unadjusted U-6 was 7.1% up from 6.9% in April
Labor Force Participation was 62.5% down from 62.7%
Unadjusted Employment rose from 158.001 million to 158.918 million
Next data release July 5^th 2024

Summary:
Total Employed increased in May, but Unemployment was also up.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment increased by 272,000 in May, and the unemployment rate changed little at 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.

Both the unemployment rate, at 4.0 percent, and the number of unemployed people, at 6.6 million, changed little in May. A year earlier, the jobless rate was 3.7 percent, and the number of unemployed people was 6.1 million.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 158.016 million for April which they adjusted slightly to 158.001 million in May.

They are currently reporting 158.918 million jobs for May which is actually an increase of 902,000 jobs based on their original numbers or 917,000 based on their new numbers for April. The LFPR was down from 62.7% to 62.5%.

The LFPR was down from 62.7% to 62.5%.

Bad News for the Market

In the perverse stock market of these post-pandemic days, the market is looking for an excuse for the FED to cut interest rates so “Bad News is Good News” for the market.

BUT… This month was the opposite of last month, the “experts” were only expecting 190,000 new jobs but the BLS reported 272,000 new jobs. So the market fell on the “good news”. However, had they focused on the Adjusted U3 number itself (like they did last month) which rose from 3.9% to 4.0% the market would have risen. This is the same percentage increase as last month which went from 3.8% in March to 3.9% in April. But last month that increase triggered a buying spree.

And all those extra jobs that the market was worried about? 43,000 of them were new government jobs! Hardly the sign of a booming economy. Mr. Market may have been fooled by the ADP report (which is released 2 days before the BLS report) that showed only 152,000 new jobs based on actual payroll records that ADP processes.

So, the real numbers don’t really matter, as Bob Prechter of Elliottwave International says, all that matters is finding an excuse to do what the market wants to do anyway.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment remains above the pre-COVID 2019 cyclical lows of 3.5%, as well as above the lows made early in 2023. The unemployment rate is inching back toward the yellow zone.

April Unemployment- Bad News is Good News?

May 4, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for April on May 3^rd,2024.

Employment / Unemployment

Seasonally Adjusted U3: 3.9% up from 3.8% in March
Unadjusted U3: 3.5% down from 3.9% in March
Unadjusted U6: 6.9% down from 7.4% in March
Labor Force Participation was 62.7% unchanged
Unadjusted Employment rose from 157.213 million to 158.016 million
Next data release June 7^th 2024

Summary:
Total Employed increased in April, Unadjusted Unemployment was down, but Seasonally adjusted Unemployment increased.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment increased by 175,000 in April, and the unemployment rate changed little at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains
occurred in health care, in social assistance, and in transportation and warehousing.

Both the unemployment rate, at 3.9 percent, and the number of unemployed people, at 6.5 million changed little in April. The unemployment rate has remained in a narrow range of 3.7 percent to 3.9 percent since August 2023.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 157.218 million for March which they adjusted slightly to 157.213 million.

They are currently reporting 158.016 million jobs for April which is actually an increase of 798,000 jobs compared to the original numbers or 803,000 based on their new numbers.

The LFPR was unchanged at 62.7%.

Bad News is Good News for the Market

In the perverse stock market of these post-pandemic days, the market is looking for an excuse for the FED to cut interest rates so “Bad News is Good News” for the market. So, with the Adjusted U3 rising, Mr. Market took that as “Bad News” and rallied.

BUT… was it really even bad news? Or was it Fake News?

First of all, it was only the “Adjusted” U3 that increased, the Unadjusted U3 was down from 3.9% to 3.5% and the Unadjusted U6 was down from 7.4% to 6.9%. So, unadjusted unemployment was good news, making it bad news for the market?

Typically we can think of the adjusted rate as a comparison to the average. So let’s look at what has happened in the UNADJUSTED U3 over the last few years.

Unadjusted U3

Date	March	April	Change
2024	3.9%	3.5%	-0.4%
2023	3.6%	3.1%	-0.5%
2022	3.8%	3.3%	-0.5%
2021	6.2%	5.7%	-0.5%

So, what do we see? Over the last few years, the unadjusted U-3 declined -0.5% from March to April so that is the “normal” behavior for March – April. But this year, it only declined -0.4%. So, in perverse Government logic, it increased by +0.1%. Thus, Adjusted U-3 went from 3.8% last month to 3.9% this month. But actual unemployment fell from 3.9% to 3.5% this is a decrease not an increase (just not quite as big a decrease as usual). But Mr. Market was looking for an excuse to rally, so any excuse will do.

As I’ve said many times, January unemployment is the worst and it gets progressively better until summer when all the kids get out of school and the workforce swells making it look like more people are unemployed.

Actually, there are some good reasons for the Seasonal adjustments see Adj vs Unadj. But in this case, looking at the Adjusted numbers compared to last month isn’t going to give you the picture the market was looking for. Looking at the chart below we can see that even at 3.9% unemployment is still in the green, so there is nothing there to convince the FED to start easing.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment remains above the pre-COVID 2019 cyclical lows of 3.5%, as well as above the lows made early in 2023. But have retreated away from the “yellow zone.”

March 2024 Employment Higher Than Expected

April 6, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for March on April 5^th,2024.

Employment / Unemployment

Seasonally Adjusted U3: 3.8% down from 3.9% in February
Unadjusted U3: 3.9% down from 4.2% in February
Unadjusted U6: 7.4% down from 7.8% in February
Labor Force Participation Rate: 62.7% up from 62.5%
Employment: 157.218 million up from 156.559 million
Next data release May 3^rd 2024

Summary:
Total Employed increased in March, Labor Force Participation was up and Seasonally Adjusted Unemployment was down. Overall, an encouraging report. The market took this as a positive sign and rallied. The one concerning area is the continued increase in government employees as a percentage of overall employees.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment rose by 303,000 in March, and the unemployment rate changed little at 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, government, and construction…”

“Among the major worker groups, the unemployment rate for Blacks (6.4 percent) increased in March, while the rates for Asians (2.5 percent) and Hispanics (4.5 percent) decreased. The
jobless rates for adult men (3.3 percent), adult women (3.6 percent), teenagers (12.6 percent), and Whites (3.4 percent) showed little or no change over the month…”

“The number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, was little changed in March. The long-term unemployed accounted for 19.5 percent of all unemployed people. Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.3 percent, were little changed in March. These measures showed little change over the year.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 156.555 million for February which they adjusted to 156.559 million (for a gain of 4,000 jobs). They are currently reporting 157.218 million jobs for March which is actually a gain of 663,000 jobs compared to their original numbers. But many of these jobs came from government. Theoretically, the government could make the unemployment numbers continue to look good by simply hiring all the unemployed workers.

Government Employment

As indicated above, Government Employment is rising rapidly sucking up available employees and keeping the unemployment rate low.

If we compare the above chart with the total Private Employment we can see that government employment is rising at a steeper rate than private employment. Initially, after COVID, private employment resumed sharply but then it leveled off some. But the government employment increase hasn’t leveled off.

Total government employment is 23.270 million compared to a total private employment of 134.863 million.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment remains above the pre-COVID 2019 cyclical lows of 3.5%, as well as above the lows made early in 2023. But have retreated away from the “yellow zone.”

February Unemployment Increases

March 9, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for February on March 8^th,2024.

Employment / Unemployment

Seasonally Adjusted U3- 3.9% up from 3.7% in January
Unadjusted U3- 4.2% up from 4.1% in January
Unadjusted U6- 7.8% down from 8.0% in January
Labor Force Participation Rate 62.5% -unchanged
Employment 156.555 million up from 155.414 million

Summary:
Although employment rose, U3 Unemployment also rose in February in both adjusted and unadjusted rates. Unadjusted U6 fell, but adjusted U6 rose from 7.2% to 7.3%. Labor Force Participation was unchanged.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing…”

“Among the major worker groups, the unemployment rates for adult women (3.5 percent) and teenagers (12.5 percent) increased over the month…”

“Among the unemployed, the number of permanent job losers increased by 174,000 to 1.7 million in February.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 155.626 million for January which they adjusted to 155.414 million (for a loss of 212,000 jobs). They are currently reporting 156.555 million jobs for February which is actually a gain of 929,000 jobs compared to their original numbers. But many of these jobs came from government, and social assistance plus food services and drinking places. These are not the type of jobs that build a robust economy. And permanent job losers are increasing.

Current Unemployment Rate Chart

Seasonally Adjusted U3 Unemployment is above the pre-COVID 2019 cyclical lows of 3.5% as well as above the lows made early in 2023. Current levels are nearing the beginning of the “Yellow Zone”.

January Employment Declines, Adjusted Unemployment Flat

February 3, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for January on February 2^nd,2024.

Employment / Unemployment

Adjusted U-3 was 3.7% unchanged since November
Unadjusted U-3 was 4.1% up from 3.5% in December
Unadjusted U-6 was 8.0% Up from 6.7% in November and 7.0% in December
Labor Force Participation was 62.5% unchanged from December but down from 62.8% in November
Unadjusted Employment fell from 158.261 million to 155.626 million

Summary:
Seasonally Adjusted Employment rose but actual employment decreased in January, Labor Force Participation was unchanged, Seasonal Adjustment indicates employment decline is normal for this time of year.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment rose by 353,000 in January, and the unemployment rate
remained at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains
occurred in professional and business services, health care, retail trade, and social
assistance. Employment declined in the mining, quarrying, and oil and gas extraction
industry…”

“In January, the unemployment rate was 3.7 percent for the third month in a row, and
the number of unemployed people was little changed at 6.1 million…”

“The number of long-term unemployed (those jobless for 27 weeks or more), at 1.3 million,
was little changed in January. The long-term unemployed accounted for 20.8 percent of all unemployed people.”

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 158.228 million for December which they adjusted to 158.261 million in January (for a gain of 33,000 jobs). They are currently reporting 155.626 million jobs for January which is actually a loss of -2,602,000 jobs compared to their original numbers. But January typically loses about this many jobs, so the seasonally adjusted unemployment rate stayed the same.

BLS Source

Current Unemployment Rate Chart

Seasonally Adjusted Unemployment is slightly above the pre-COVID 2019 cyclical lows of 3.5% as well as above the lows made early in 2023. Current levels are still within the “Green Zone”.

December Unemployment Unchanged

January 6, 2024 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for December on January 5^th,2024.

Employment Up- Unemployment Down

Adjusted U-3 was 3.7% unchanged from November
Unadjusted U-3 was 3.5% unchanged from November
Unadjusted U-6 was 7.0% Up from 6.7% in November
Labor Force Participation was 62.5% down from 62.8% in November
Unadjusted Employment fell from 158.395 million to 158.228 million

Summary:
Total Employed decreased in December, Labor Force Participation was down but Unemployment was unchanged.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

Total nonfarm payroll employment increased by 216,000 in December, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in government, health care, social assistance, and construction, while transportation and warehousing lost jobs…

The unemployment rate held at 3.7 percent in December, and the number of unemployed persons was essentially unchanged at 6.3 million. These measures are higher than a year earlier, when the jobless rate was 3.5 percent and the number of unemployed persons was 5.7 million.

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…Originally the BLS reported employment of 158.461 million for November which they adjusted to 158.395 million in December (for a loss of -66,000 jobs). They are currently reporting 158.228 million jobs for December which is actually a loss of -233,000 jobs compared to their original numbers. This in confirmed by the decline in the LFPR which fell from 62.8% to 62.5%.

BLS Source

Current Unemployment Rate Chart

Adjusted Unemployment is slightly above the pre-COVID 2019 cyclical lows of 3.5% as well as above the lows made earlier this year. Current levels are still within the “Green Zone”.

November 2023 Employment Situation

December 9, 2023 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for November on December 8^th,2023.

Employment Up- Unemployment Down

Adjusted U-3 was 3.7% down from 3.9% in October
Unadjusted U-3 was 3.5% down from 3.6% in October
Unadjusted U-6 was 6.7% down from 6.8% in October
Labor Force Participation was 62.7% down from 62.8% in October
Unadjusted Employment rose from 157.984 million to 158.461 million

Summary:
Total Employed increased in November, Unemployment was down, and Labor Force Participation was up.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

“Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate
edged down to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains
occurred in health care and government. Employment also increased in manufacturing, reflecting
the return of workers from a strike. Employment in retail trade declined…

Among the major worker groups, the unemployment rate for teenagers (11.4 percent) edged down
in November. The jobless rates for adult men (3.7 percent), adult women (3.1 percent), Whites
(3.3 percent), Blacks (5.8 percent), Asians (3.5 percent), and Hispanics (4.6 percent) showed
little or no change over the month.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs”.

Looking at the Unadjusted Establishment Survey report we see…
Originally the BLS reported employment of 157.984 million for October which uncharacteristically they didn’t adjust in November. They are currently reporting 158.461 million jobs for November which is actually an increase of 477,000 jobs. The LFPR rose from 62.7 to 62.8%.

BLS Source

Current Unemployment Rate Chart

Adjusted Unemployment is slightly above the pre-COVID 2019 cyclical lows of 3.5% as well as above the lows made earlier this year. Current levels are still within the “Green Zone”.

October 2023 Unemployment by State

November 17, 2023 by Tim McMahon

The Bureau of Labor Statistics reported that: “Unemployment rates were higher in October in 26 states and stable in 24 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Twenty-one states had jobless rate decreases from a year earlier, 12 states and the District had increases, and 17 states had little change. The national unemployment rate, 3.9 percent, changed little both over the month and over the year.”

In the following chart, bubble size indicates the number of unemployed. As we can see the largest number of unemployed is the red California bubble followed by the purple Texas bubble.

The vertical axis indicates the percent change from a year ago. So, New Jersey has the biggest change from a year ago, followed by California and D.C. while the majority of states are below the zero line (indicating lower unemployment than a year ago). Maryland is the most improved followed by Oregon.

The horizontal axis indicates the current unemployment rate (in percent). Puerto Rico has the highest unemployment rate by far, followed by Nevada, D.C., California, New Jersey, and Illinois.

Source: BLS