BLS

Unemployment Rate Falls Contrary to Economist’s Projections

June 6, 2020 by Tim McMahon

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

COVID-19 Unemployment Decreases as People Return to Work

Unadjusted U-3 was Down from 14.4% to 13.0%.
Adjusted U-3 was Down from 14.7% to 13.3%.
Unadjusted U-6 was Down from 22.4% to 20.7%.
Labor Force Participation rose from 60.2% to 60.8%.
Unadjusted Employment rose by approx. 2.9 million jobs.

Civilian Unemployment

Economists were predicting another stairstep increase in unemployment in May. According to a CNBC article “Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5% from April’s 14.7%.”

Instead, Unemployment fell to 13.3% and payrolls rose by 2.9 million making the “experts” wrong by roughly 11 million.

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

“Nonfarm payroll employment increased by 2.5 million in May, and the unemployment rate declined by 1.4 percentage points to 13.3 percent. These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.

In May, employment rose in several major industry sectors, with the largest gains in leisure and hospitality, construction, education and health services, and retail trade. By contrast, employment in government continued to decline sharply.”

Of course, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)”

But looking at the CES report we see…
Originally the BLS reported 131.071 million jobs for April and then they subtracted 660,000 jobs from that estimate.
So currently they are saying 130.411 million jobs for April and 133.342 million jobs for May which is actually an increase of 2.271 million jobs compared to what they originally reported last month. Or 2.931 million jobs based on their current estimates of April’s employment.

Coronavirus Shutdown Causes 20 Million Job Losses

May 9, 2020 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for April on May 8^th.

COVID-19 Shutdowns Send Unemployment Rate Soaring

Unadjusted U-3 was Up from 4.5% to 14.4%!
Adjusted U-3 was Up from 4.4% to 14.7%!
Unadjusted U-6 was Up from 8.9% to 22.4%!
Labor Force Participation fell from 62.7% to 60.2%.
Unadjusted Employment down by approx. -19.5 MILLION jobs.

Civilian Unemployment

In April, the ranks of the unemployed swelled by almost 20 million bringing it up to approximately 23 million in total. Rather than looking at percentages, the following chart looks at the actual number of unemployed individuals. The current number of unemployed is considerably higher than at the peak of the 2008-2010 “great recession”.

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

Nonfarm payroll employment declined by 20.5 million in April, and the unemployment rate increased to 14.7 percent, reflecting the widespread impact on the job market of the coronavirus (COVID-19) pandemic and efforts to contain it. Employment fell sharply in all major industry sectors, with a
particularly large decline in the leisure and hospitality sector.

The response rate for the household survey continued to be adversely affected by pandemic-related issues, while that for the establishment survey returned to a normal range in April. In addition, there were changes to the estimation methods for the establishment survey to better account for the historic number of temporary or permanent business closures in April. The impacts of the pandemic on the household and payroll surveys are detailed in the April Employment Situation news release and accompanying materials (available on the BLS website)). For both surveys, we were able to obtain estimates that met BLS standards for accuracy and reliability.

The substantial job declines related to the coronavirus pandemic started in March, as payroll employment declined by 870,000, as revised. Job losses accelerated in April, as an additional 20.5 million jobs were lost. These April losses were pervasive across all industry sectors, and brought nonfarm employment to its lowest level since February 2011.

Looking at the CES report we see…
Originally the BLS reported 150.804 million jobs for March and then they subtracted 221,000 jobs from that estimate.
So currently they are saying 150.583 million jobs for March and 131.071 million jobs for April which is actually a decrease of -19.733 million jobs compared to what they originally reported last month. Or -19.512 million jobs based on their current estimates of March’s employment.

February Jobs Report Smashes Expectations

March 7, 2020 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for February on March 6th.

Unemployment returns to 50-year lows. The “Seasonally Adjusted” Unemployment Rate fell from 3.6% in January to 3.5% in February. Thus returning to the previous low levels of September, November, and December after increasing slightly in January.
We are still in record low territory and that won’t change overnight. Seasonally adjusted U-3 Unemployment notched up 1/10^th of a percent in January and fell back the same amount in February. The Labor Force Participation Rate (LFPR) remains in territory that it hasn’t seen in years…

This is better than expected results and according to @AP News it shows that “the economy was in strong shape before the coronavirus began to sweep
through the U.S. “

The average monthly wage is up almost $130 over year-ago levels so two-income families are bringing in an average of at least $250 a month more. (See employment by Sector for more info).

This month we will also look at unemployment by Education level, and reasons for unemployment.

February Jobs Report Smashes Expectations

Unadjusted U-3 was down from 4.0% to 3.8%!
Adjusted U-3 was down slightly from 3.6% to 3.5%!
Unadjusted U-6 was down from 7.7% to 7.4%!
Labor Force Participation remains at the highest level since 2013.
Unadjusted Employment Up by approx. 880,000 jobs.

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

“Nonfarm payroll employment rose by 273,000 in February, and the unemployment rate was little changed at 3.5 percent.
Notable employment gains occurred in health care and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities.”

But, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)” rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)”

Looking at the CES report we see…

Originally the BLS reported 150.102 million jobs for January and then they added 15,000 jobs to that estimate.
So currently they are saying 150.117 million jobs for January and 150.997 million jobs for February
which is actually an increase of 895,000 jobs over what they originally reported last month and 880,000 more than current estimates for last month.

Of course, the Corona Virus scare is affecting the Stock Market as the AP news was quick to point out. So March numbers may be affected by that.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary.

January Employment Report- Maybe Not as Good?

February 8, 2020 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for January on February 7^th.

Last month we told you that the employment report was not as bad as the media tried to paint it. This month The New York Times is saying “Job Growth Gives the Economy an Upbeat Start to the Year” while Marketwatch calls the Labor Market “Astounding” and once again we have a slightly different opinion.

Yes, we are still in record low territory and that won’t change overnight. Seasonally adjusted Unemployment only notched up 1/10^th of a percent and the Labor Force Participation Rate (LFPR) has entered territory that it hasn’t seen in years… BUT the unadjusted numbers jumped up significantly (as they do every year) and the BLS adjusted the Population numbers DOWN significantly. This adjustment is what the pundits are not seeing and what makes me think the numbers may not be quite as good as they appear i.e. lower population means a higher percentage appears to be working (even though the actual unadjusted employment fell). This could have given the LFPR the apparent boost and made the Adjusted U-3 increase by less than it would have without the population adjustment. This is still not a bad employment report just perhaps not as rosy as the media made it sound.

Key January Employment and Unemployment Numbers

Unadjusted U-3 Unemployment- 4.0% Up from December’s 3.5%… Typically up in January, it was 4.4% in January 2019.
Adjusted U-3 Unemployment- 3.6% Up from 3.5% in December.
Unadjusted U-6 Unemployment- 7.7% Up from 6.7% in December… was 8.8% in January 2019.
Unadjusted Employment (Establishment Survey)- 150.102 million down from 152,934 in December.
Labor Force Participation Rate- 63.4% Up from 63.2%.

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

Nonfarm payroll employment rose by 225,000 in January, and the unemployment rate was little changed at 3.6 percent.
Notable employment gains occurred in construction, in health care, and in transportation and warehousing.
In 2019, job growth averaged 175,000 per month.

Of course, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)” which showed a non-adjusted drop of 2.8 million jobs.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary.

December Jobs Report Not “Disappointing”

January 11, 2020 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for December on January 10^th.

CNBC was quick to label it “disappointing” but at 1/10^th of a percent off a 50 year low how disappointing can it really be? The unadjusted numbers were up slightly but that isn’t unusual for December and they weren’t even up by as much as they were last year. In December 2018 the unadjusted U-6 went from 7.2% to 7.5% (i.e. 0.3%). This year it went from 6.5% to 6.7% (up 0.2%). Last year the unadjusted U-3 went from 3.5% to 3.7% (up 0.2%) this year it went from 3.3% to 3.4% (up 0.1%). Last year the adjusted U-3 went from 3.7% to 3.9%. This year it went from… wait for it… 3.5% to 3.5%… what? Yes, it was unchanged. On a seasonally adjusted basis, unemployment is exactly the same as last month (i.e. one of the best months in recorded history). What about Labor Force Participation? Unchanged at 63.2%… slightly off recent highs of 63.3% which it reached in October. The only “fly in the ointment” was actual unadjusted employment which was down slightly while adjusted Employment was still up by 145,000.

December Jobs Report

Adjusted U-3 was Unchanged at 3.5%!
Unadjusted U-3 was up slightly from 3.3% to 3.4%!
Unadjusted U-6 was Up from 6.5% to 6.7%
Labor Force Participation was unchanged at 63.2%.
Unadjusted Employment down slightly while adjusted Employment was up by 145,000.

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

Nonfarm payroll employment rose by 145,000 in December, and the unemployment rate was unchanged at 3.5 percent. Notable employment gains occurred in retail trade and health care, while mining lost jobs. In 2019, payroll employment growth totaled 2.1 million, compared with a gain of 2.7 million in 2018.

Of course, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)”

This was not a bad jobs report!

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary.

November Unemployment- Another Banner Month

December 7, 2019 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for November on December 6^th.

Unemployment returns to 50-year lows. The “Seasonally Adjusted” Unemployment Rate for November fell from 3.6% in October to 3.5% despite the media’s narrative that many employers are either delaying hiring until a breakthrough in the U.S.-China trade war is reached.

November Jobs Report Smashes Expectations Again

Unadjusted U-3 was Unchanged at 3.3%!
Adjusted U-3 was down slightly from 3.6% to 3.5%!
Unadjusted U-6 was Unchanged at 6.5%!
Labor Force Participation retreated slightly from 63.3% to 63.2%.
Unadjusted Employment Up by approx. 660,000 jobs.

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

“Nonfarm payroll employment rose by 266,000 in November, and the unemployment rate, at 3.5 percent, was little changed. Notable job gains occurred in health care and in professional and technical services. Manufacturing employment increased as workers in motor vehicles and parts returned from a strike. Employment in health care increased by 45,000… Employment rose by 31,000 in professional and technical services… Employment in leisure and hospitality +45,000… Employment in transportation and warehousing +16,000… Employment in financial activities +13,000…

Of course, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)”
Originally the BLS reported 152,962 million jobs for October and they added 40,000 jobs to that estimate. Currently they are estimating 153.624 million jobs for November which is an increase of 662,000 jobs over what they originally reported last month. So what he is actually saying is that there were 266,000 more jobs created in November than is normal for this time of year!

Returning striking General Motors autoworkers added about 30,000 jobs in November, a one-time bounce-back that followed a 30,000 decline in October, when the GM strikers weren’t counted as employed. But even without that 30,000 Manufacturing still added 24,000 additional jobs!

Just days ago, the media and Moody’s Chief Economist Mark Zandi were trying to paint a grim picture for the economy. Zandi told CNBC there was trouble brewing in the jobs market “Manufacturers, commodity producers and retailers are shedding jobs. Job openings are declining, and if job growth slows any further unemployment will increase.”
Instead of a Decrease in jobs we got a massive INCREASE. And the futures market spiked upward on the good news.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary.

October Unemployment- Jobs Much Better Than Expected

November 2, 2019 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for October on November 1^st.

Unemployment is still near record lows. Although the “Seasonally Adjusted” Unemployment Rate for October ticked up from 3.5% in September to 3.6%. However, the unadjusted U-3 Unemployment rate was unchanged at 3.3%. This Jobs report was unexpectedly good despite counting 30,000 “unemployed” strikers at auto manufacturers.

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

“Nonfarm payroll employment increased by 128,000 in October, and the unemployment rate was little changed at 3.6 percent. Notable employment gains occurred in food services and drinking places, social assistance, and financial activities. Within manufacturing, employment declined in motor vehicles and parts due to strike activity. Federal government employment was down, reflecting a drop in the number of temporary jobs for the 2020 Census.”

Experts had been predicting that the economy would add no more than 75,000 jobs. In fact, MarketWatch on Thursday told readers that
the report would be “a big dud” due to the impact of the General Motors strike on the overall numbers.
If it hadn’t been for the strike the October numbers would have been even better.

Of course, the Commissioner is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in the BLS’ “Current Employment Statistics survey (CES)”
in reality, the BLS has done a lot of “Adjusting” over the last few months.
The original CES numbers the BLS reported for August was 151.517 million people employed in August
then later they adjusted it up to 151.607 million. And for September they originally reported there were 151.949 million employed
and currently they are reporting 152.962 million employed so that is an actual increase of 1.013 million NOT and adjusted increase of 128,000!
But in addition to “Seasonal Adjustment”, they adjusted September’s number up to 152.015 million
so the difference between September and October appears to be less than it actually was.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary:

October Jobs Report Smashes Expectations

Unadjusted U-3 was Unchanged at 3.3%!
Adjusted U-3 was up slightly from 3.5% to 3.6%!
Unadjusted U-6 was Unchanged at 6.5%!
Labor Force Participation hits levels not seen since 2013 at recent peak levels of 63.3%.
Unadjusted Employment Up
The unemployment rate for black Americans nudged lower to 5.4 percent, setting a new record,

Key factors in the BLS report were:
Employment in food services and drinking places rose by 48,000 over the month.
Financial activities employment rose by 15,000, with nearly half of the gain occurring in insurance carriers and related activities (+7,000).

Social assistance added 20,000 jobs in October, with most of the gain occurring in individual and family services.

Financial activities added 16,000 jobs.
Professional and business services added 22,000 jobs.

Health care added 15,000 jobs.

Manufacturing employment declined by 36,000 in October.
Employment in motor vehicles and parts manufacturing decreased
by 42,000, reflecting strike activity.

September Unemployment Rate Hits 50-Year Low

October 5, 2019 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for September released on October 4^th. Unemployment is at record lows. According to the BLS, the “Seasonally Adjusted” Unemployment Rate for September fell to 3.5% after spending 3 months at 3.7%. The last time unemployment was this low was in December 1969 almost exactly 50 years ago.

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

“The unemployment rate declined by 0.2 percentage point to 3.5 percent in September, and nonfarm payroll employment increased by 136,000. Employment continued to trend up in health
care and in professional and business services… Health care employment rose by +39,000 in September… employment continued to trend up in professional and business services +34,000… Employment in transportation and warehousing edged up by +16,000… Government employment also continued to trend up in September +22,000…”

Of course, he is talking about “Seasonally Adjusted Jobs” in reality last month the BLS reported there were 151.517 million people employed in August and this month they are reporting there are 151.949 million employed in September, so that is an increase of 432,000 jobs.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary:

Key September Employment and Unemployment Numbers

This month’s Unemployment report was full of positive news.

Adjusted U-3 Unemployment- 3.5% down from 3.7% June through August.
Unadjusted U-3 Unemployment- 3.3% down from 3.8% in August and 4.0% in July, it was 4.4% in January.
Unadjusted U-6 Unemployment- 6.5% down a whopping -0.8% from 7.3% in August.
Unadjusted Employment (Establishment Survey)- 151.949 up from the 151.517 million the BLS reported in August.
Labor Force Participation Rate- 63.2% unchanged from August but up from 63.0% in July, and 62.9% June.

Key factors in the BLS report were:

Health care employment increased by 39,000

Professional and business services increased by 34,000

Transportation and warehousing increased by 16,000

Government employment increased by 22,000 approximately 1,000 of those were related to the upcoming census.

Hispanic and African American unemployment are both at the lowest levels on record.

June Unemployment Higher

July 6, 2019 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released their monthly unemployment survey results for June on July 5^th. Unemployment is still near record lows but it has ticked up a bit.

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

” Nonfarm payroll employment increased by 224,000 in June, and the unemployment rate was little changed at 3.7 percent.
Over the month, notable job gains occurred in professional and business services, in health care, and in transportation and warehousing.”

Of course the Commissioner is talking about “Seasonally Adjusted Jobs” in reality there were 152.307 million people employed in June up from 151.600 million employed in May so the actual increase was 707,000 new jobs in June. There were only 148.295 million employed in January so there are over 4 million more people employed in June than in January!

Key factors in the report were:

Employment in Professional and Business Services increased by 51,000…
Health care employment increased by 35,000 in June…
Employment in transportation and warehousing increased by 24,000
Construction employment rose by 21,000…

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary:

Key June Employment and Unemployment Numbers

Adjusted U-3 Unemployment- 3.7% Up from 3.6% in May
Unadjusted U-3 Unemployment- 3.8% Up from 3.4% in May but still below 4.1% in February, and 4.4% in January.
Unadjusted U-6 Unemployment- 7.5% Up from 6.7% in May. It was 7.5% in March, 7.7% in February and 8.8% in January.
Unadjusted Employment (Establishment Survey)- 152.307 million up from 151.600 Million in May and 148.295 million in January.
Labor Force Participation Rate- 62.9% up from 62.8% in April and May down from 63.0% in March and from the peak of 63.2% in February.

Current Seasonally Adjusted U-3 levels are still below the 3.8% lows of 2000. Prior to that we have to go all the way back to 1969 to see better unemployment levels than we have currently. If we break below 3.4% we have to go all the way back to 1953 to find lower levels and remember that was during the boom that followed WWII with a massive loss of the workforce due to the war so we probably won’t see levels that low again.

May Unemployment Still Low

June 8, 2019 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released their monthly unemployment survey results for May on June 7^th. Although Unemployment is still at record lows job creation is less than expected.

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

The U.S. economy created 75,000 jobs in May and the seasonally adjusted unemployment rate held steady at 3.6 percent. However, economists projected a 175,000 jobs gain and instead only got 75,000 so they were disappointed but that didn’t stop the stock market with the DOW gaining over 1% in a single day.

According to the BLS Commissioner’s report for this month:

“ Nonfarm payroll employment edged up in May (+75,000), and the unemployment rate remained at 3.6 percent.
Employment continued to trend up in professional and business services and in health care…
In May, 4.4 million people were working part time for economic reasons (also referred to as involuntary part-time workers),
down by 299,000 from the previous month and by 565,000 over the year.”

Key factors in the report were:
Employment in professional and business services increased by 33,000…
Health Care employment rose by 16,000…
Construction employment increased by 4,000…
Seasonally Adjusted U-3 Unemployment remains at its lowest rate since December 1969.

Of course the Commissioner is talking about “Seasonally Adjusted” jobs. In unadjusted terms April had 150.942 million jobs and May had 151.629 million for an actual increase of 687,000 jobs.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary:

Key May Employment and Unemployment Numbers

Adjusted U-3 Unemployment- 3.6% unchanged from April
Unadjusted U-3 Unemployment- 3.4% up from 3.3% in April but down from 3.9% in March and 4.1% in February, and 4.4% in January.
Unadjusted U-6 Unemployment- 6.7% down from 6.9% in April and 7.5% in March, 7.7% in February and 8.8% in January.
Unadjusted Employment (Establishment Survey)- 151.629 million up from 150.988 million in April, 149.862 million in March, 149.143 million in February and 148.295 million in January.
Labor Force Participation Rate- 62.8% unchanged from April.

Current Seasonally Adjusted U-3 levels are below the 3.8% lows of 2000. Prior to that we have to go all the way back to 1969 to see better unemployment levels than we have currently. If we break below 3.4% we have to go all the way back to 1953 to find lower levels and remember that was during the boom that followed WWII with a massive loss of the workforce due to the war so we probably won’t see levels that low again.