employment

July 2022 Jobs Report- Not as Rosy as They’d Have You Believe

August 6, 2022 by Tim McMahon

Typically July Jobs Reports aren’t that great anyway so “Seasonal Adjustments” correct for that but let’s dig a bit deeper today.

Adjusted U-3 was Down from 3.6% in June to 3.5% in July.
Unadjusted U-3 was Unchanged at 3.8% for June and July after being 3.4% in May.
Unadjusted U-6 went from 6.7% in May to 7.0% in June to 7.2% in July.
Unadjusted Employment FELL from 152.634 million to 152.249 million.
Average Weekly Wages Still Rising

Looking Back:

Last month (for June) we reported the following “Early Indicators of a possible recession”

Labor Force Participation Down from 62.3% to 62.2%
Upturn in Uneducated Unemployment
Rising Unemployment among the newly unemployed
Average Weekly Hours among manufacturing workers falling

July’s Indicators

According to CNBC:

“Hiring in July was far better than expected, defying multiple other signs that the economic recovery is losing steam, the Bureau of Labor Statistics reported Friday.”

One of those “other signs” is the two consecutive quarters of falling GDP. This is definitely a sign of a slowing economy, but we have typically followed the National Bureau of Economic Research, i.e. NBER’s guidance of when a recession starts. Because that includes a variety of other factors (including unemployment) giving a fuller picture of the total economy, not just GDP. But NBER typically takes a while before they declare that a recession began months ago.

But… one reason the Employment situation is as good as it is, is because of the massive injection of FED funny money over the last two years which artificially boosted the economy.

According to CNN:

“The US economy has now regained all jobs lost during the pandemic, after a blowout July jobs report that showed a gain of 528,000 jobs, according to data released Friday by the Bureau of Labor Statistics. The massive monthly gain was more than double the 250,000 that economists were expecting, according to Refinitiv.”

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

“Nonfarm payroll employment increased by 528,000 in July, and the unemployment rate edged down to 3.5 percent. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. In July, both total nonfarm employment and the unemployment rate returned to their February 2020 pre-pandemic levels. Private-sector employment is 629,000 higher than in February 2020, although several sectors have yet to recover. Government employment is 597,000 lower than its pre-pandemic level.”

You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs” from the “Household Survey” rather than looking at the results reported by actual companies in the BLS “Establishment Survey”.

But looking at the Establishment Survey report we see…
Originally the BLS reported employment of 152.692 million for June which they adjusted this month down to 152.634 million. So, 58,000 jobs disappeared for June. So even if they just reported the same number as they originally did in June we would have a 58,000 job increase!

Now they are reporting 152.249 million jobs for July which is actually a decrease of 443,000 jobs based on their original estimates or a decrease of 385,000 based on their updated numbers. So employment is actually down, unadjusted U6 is UP, Unadjusted U3 is UP, and LFPR is Down, but somehow this is presented as a rosy report.

The other factor in their rosy outlook is that employment is now back to pre-covid levels. But when we look at the Establishment Survey numbers we see that February 2020 (pre-covid) at 150.968 million is actually below the November 2019 peak of 153.095 million. So the current 152.249 million is still below the 2019 peak, and that doesn’t even count the roughly 4 million increase in documented population plus the untold millions of new “undocumented” residents.

Historical Employment with Recessions

May Employment Up – Unemployment Unchanged

June 4, 2022 by Tim McMahon

May 2022 Employment — Bureau of Labor Statistics (BLS) Jobs Report

Adjusted U-3 was Unchanged at 3.6%
Unadjusted U-3 was Up from 3.3% to 3.4%
Unadjusted U-6 was Up from 6.6% to 6.7%
Labor Force Participation Up from 62.2% to 62.3%
Unadjusted Employment rose from 150.964 to 151.773 million

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

“Nonfarm payroll employment increased by 390,000 in May, and the unemployment rate remained at 3.6 percent. Notable job gains occurred in leisure and hospitality, in professional and business services, and in transportation and warehousing. Employment in retail trade declined. Nonfarm employment is down by 822,000, or 0.5 percent, from its February 2020 level before the onset of the coronavirus (COVID-19) pandemic.
In May, employment growth continued in leisure and hospitality (+84,000)… Employment in professional and business services increased by 75,000 in May… Transportation and warehousing added 47,000 jobs…”
You can read the full BLS report here.

As usual, they are talking about “Seasonally Adjusted Jobs” from the “Household Survey” rather than looking at the results reported by actual companies in the BLS “Establishment Survey”

But looking at the Establishment Survey report we see…
Originally the BLS reported employment of 150.938 million for April which they adjusted to 150.964 million. So they added 26,000 jobs disappeared for April. They are reporting 151.773 million jobs for May which is actually an increase of 835,000 jobs based on their original estimates or an increase of 809,000 based on their updated numbers.

Surprisingly, Retail LOST -60,700 jobs.

According to Trading Economics:
The US unemployment rate was unchanged at 3.6 percent in May of 2022, the same as in the previous two months, remaining the lowest since February 2020 and compared with market expectations of 3.5 percent. The number of unemployed people increased by 9 thousand to 5.950 million, while employment levels rose by 321 thousand to 158.426 million. Meanwhile, the labor force participation rate edged up to 62.3 percent in May from a 3-month low of 62.2 percent in April.

Stroudsburg PA News headline says “Lowest Unemployment Rate since 1969” … Umm No! Not really… the article text backtracks a little adding the word “about” saying… “about the lowest it has been since 1969.” I suppose that is “almost true” if you disregard the 4 months in 2019 and 2020 when it was lower (i.e. 3.5%) and 3.6% is almost 3.4%. I guess that is what passes for journalism these days.

April Unemployment Holds Steady

May 7, 2022 by Tim McMahon

April 2022 Employment — Bureau of Labor Statistics (BLS) Jobs Report

Adjusted U-3 was Unchanged at 3.6%
Unadjusted U-3 was Down from 3.8% to 3.3%
Unadjusted U-6 was Down from 7.1% to 6.6%
Labor Force Participation Down from 62.4% to 62.2%
Unadjusted Employment rose from 149. 912 to 150.938 million

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

“Nonfarm payroll employment increased by 428,000 in April, and the unemployment rate was unchanged at 3.6 percent. Job growth was widespread, led by gains in leisure and hospitality, in manufacturing, and in transportation and warehousing.

Nonfarm employment is down by 1.2 million, or 0.8 percent, from its February 2020 level before the onset of the coronavirus (COVID-19) pandemic.

In April, employment growth continued in leisure and hospitality (+78,000), with gains in food services and drinking places (+44,000) and accommodation (+22,000). Employment in leisure and hospitality is down by 1.4 million, or 8.5 percent, from its February 2020 level.”

As usual, they are talking about “Seasonally Adjusted Jobs” from the “Household Survey” rather than looking at the results reported by actual companies in the BLS “Establishment Survey”

Looking at the Establishment Survey report we see…
Originally the BLS reported employment of 149.938 million for March which they adjusted to 149.912 million. So 26,000 jobs disappeared for March. They are reporting 150.938 million jobs for April which is actually an increase of exactly 1,000,000 jobs based on their original estimates or an increase of 1,026,000 based on their updated numbers.

According to Jeffrey Tucker at Gilder’s Daily Prophecy “The jobs report this morning didn’t look half bad on the surface… The trouble was in the footnotes: The U.S. labor force shrank by 363,000 people in April from a month earlier… The labor force participation rate… ticked down to 62.2% in April from 62.4% in March.

So the dropout economy is getting worse, not better, rendering these unemployment numbers rather pointless… Women with kids have dropped out and child care is too expensive. Many men just moved home to mom and dad and are happy to live off savings and look forward to going into debt. Plus, the demoralization of the workforce after lockdowns has drained American ambition… In addition, wage growth is slowing, a fact which might cheer the Fed, but is bad news for workers because it means the purchasing power of their wages will fall further, after having endured a devastating hit over the last six months.

A former Fed official went public with a very obvious statement, namely that the federal funds rate needs to be 3.5% in order to even begin to make a dent in inflation.
How does Richard Clarida know this? It’s not rocket science: short-term rates need to be positive in real terms rather than negative. That means 3.5%, yes, but more likely double or triple that. The Fed simply won’t go there. The Fed’s theory is that it can put out the house fire by carefully spraying a bit of water here and there in a way that doesn’t cause shock and alarm.”

February Employment / Unemployment Report

March 4, 2022 by Tim McMahon

February 2022 Unemployment report from the Bureau of Labor Statistics (BLS)

Adjusted U-3 was Down from 4.0% to 3.8%
Unadjusted U-3 was Down from 4.4% to 4.1%
Unadjusted U-6 was Down from 7.9% to 7.6%
Labor Force Participation Up from 62.2% 62.3%
Unadjusted Employment rose from 147. 510 million to 148. 964 million

February 2022 Unemployment report:

AP says: Strong Job Growth Points to COVID’s Fading Grip on Economy “Employers added a robust 678,000 jobs in February, the largest monthly total since July, the Labor Department reported Friday.”

CNBC says: U.S. unemployment rate falls in February, but ticks up for Black women “The unemployment rate for Black women ticked up to 6.1% in February from 5.8% in the previous month.”

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

“Nonfarm payroll employment rose by 678,000 in February, and the unemployment rate edged down to 3.8 percent. Employment growth was widespread, led by gains in leisure and hospitality, professional and business services, health care, and construction. Employment is down by 2.1 million, or 1.4 percent, from its level before the onset of the coronavirus (COVID-19) pandemic in February 2020.

In February, employment growth continued in leisure and hospitality (+179,000) with job gains in food services and drinking places (+124,000) and accommodation (+28,000). “

As usual, they are 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 employment of 147.525 million for January which they adjusted to 147.510 million. So 15,000 jobs disappeared for January. But they are reporting 148.964 million jobs for February which is actually an increase of 1,439,000 jobs based on their original estimates or an increase of 1,454,000 based on their updated numbers.

January 2022 Unemployment Up not DOWN as Reported

February 5, 2022 by Tim McMahon

January 2022 Unemployment report from the Bureau of Labor Statistics (BLS)

Adjusted U-3 was UP from 3.9% to 4.0%
Unadjusted U-3 was Up from 3.7% to 4.4%
Unadjusted U-6 was Up from 7.2% to 7.9%
Labor Force Participation Up from 61.9% 62.2%
Unadjusted Employment fell from 150.349 million to 147. 525 million

January 2022 Unemployment report: Establishment news media chose to put a positive spin on this month’s Jobs report focusing on the Bureau of Labor Statistics 467,000 jobs number. U.S. News says, US Economy Defies Omicron and Adds 467,000 Jobs in January. Long-time readers of this site will remember that this is a Seasonally Adjusted number based on the “Current Population Survey (CPS)” rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)”. As we explain below, more people were NOT employed in January than in December all that the adjusted number indicates is that fewer people lost their jobs in January than in a typical January. In actuality, there were 2.6 million fewer employed in January 2022 than in December 2021 and even the Seasonally Adjusted Unemployment rate INCREASED from 3.9% to 4.0% while UNADJUSTED unemployment increased even more.

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

“Nonfarm payroll employment increased by 467,000 in January, and the unemployment rate was little changed at 4.0 percent. Employment growth continued in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing. Employment has increased by 19.1 million since April 2020 but is down by 2.9 million, or 1.9 percent, from its level before the onset of the coronavirus (COVID-19) pandemic in February 2020. Monthly job growth averaged 555,000 in 2021.”

But looking at the CES report we see…
Originally the BLS reported 150.170 million for December which they adjusted to 150.349 million. For January they are reporting 147.525 million.
which is actually a decrease of 2,645,000 jobs based on their original estimates or a decrease of 2,824,000 based on their updated numbers. Typically January loses a significant number of jobs due to post-holiday layoffs so January employment decreases are not that unusual. But if we look at the adjusted numbers we see that even the seasonally adjusted unemployment was up suggesting that the layoff was a bit worse than usual.

December Unemployment Rates by State

February 1, 2022 by Tim McMahon

Unemployment rates fell in 42 states plus the District of Columbia from the previous month. Forty-Eight states along with D.C. had significantly lower unemployment rates than year-ago levels. Iowa and Maine’s unemployment rates have only fallen by -0.2% and -0.3% respectively.

California had the highest number of unemployed individuals at 1.238 million which gave them a 6.5% unemployment rate. The next highest number of unemployed was Texas with 712,828 unemployed and a 5.0% unemployment rate. Puerto Rico had the highest unemployment rate at 7.5%. And Nebraska had the lowest unemployment rate at 1.7%.

In the following chart, bubble size indicates the number of unemployed. The vertical axis indicates the percent change from a year ago, while the horizontal axis indicates the current unemployment rate (in percent).

State	Unemployment Rate	12-month % Change	Number of Unemployed
Alabama	3.1	-1.6	69,854
Alaska	5.7	-0.8	20,233
Arizona	4.1	-2.7	150,043
Arkansas	3.1	-1.8	42,609
California	6.5	-2.8	1,238,037
Colorado	4.8	-2.1	154,292
Connecticut	5.8	-2.4	105,215
Delaware	5.0	-0.9	24,609
District of Columbia	5.8	-3.0	23,741
Florida	4.4	-0.7	466,176
Georgia	2.6	-2.7	135,906
Hawaii	5.7	-4.6	37,057
Idaho	2.4	-1.4	22,088
Illinois	5.3	-2.7	333,136
Indiana	2.7	-1.9	88,240
Iowa	3.5	-0.2	57,907
Kansas	3.3	-1.4	49,796
Kentucky	3.9	-1.7	78,817
Louisiana	4.8	-3.1	98,295
Maine	4.7	-0.3	31,806
Maryland	5.0	-1.8	156,473
Massachusetts	3.9	-4.5	145,093
Michigan	5.6	-2.6	265,115
Minnesota	3.1	-1.6	93,906
Mississippi	4.5	-2.1	56,792
Missouri	3.3	-1.1	101,988
Montana	2.5	-1.7	13,689
Nebraska	1.7	-1.7	17,128
Nevada	6.4	-1.8	99,409
New Hampshire	2.6	-1.2	19,561
New Jersey	6.3	-1.4	280,211
New Mexico	5.8	-2.8	55,640
New York	6.2	-2.5	572,626
North Carolina	3.7	-2.4	188,391
North Dakota	3.1	-1.6	12,297
Ohio	4.5	-1.1	256,392
Oklahoma	2.3	-2.2	42,758
Oregon	4.1	-2.2	89,349
Pennsylvania	5.4	-1.7	337,133
Rhode Island	4.8	-3.1	26,684
South Carolina	3.5	-2.1	85,090
South Dakota	2.6	-0.7	12,173
Tennessee	3.8	-1.8	127,341
Texas	5.0	-1.9	712,828
Utah	1.9	-1.4	31,817
Vermont	2.5	-1.0	7,972
Virginia	3.2	-2.4	136,557
Washington	4.5	-1.8	176,857
West Virginia	3.7	-3.0	28,903
Wisconsin	2.8	-1.2	86,197
Wyoming	3.3	-1.9	9,717
Puerto Rico	7.5	-1.7	82,653

Nebraska had the lowest jobless rate in December, at 1.7 percent, followed by Utah, 1.9 percent. The rates in the following 12 states set new series lows (since 1976): Arkansas (3.1 percent), Georgia (2.6 percent), Idaho (2.4 percent), Indiana (2.7 percent), Kentucky (3.9 percent), Mississippi (4.5 percent), Montana (2.5 percent), Nebraska (1.7 percent), Oklahoma (2.3 percent), Utah (1.9 percent), West Virginia (3.7 percent), and Wisconsin (2.8 percent). California and Nevada had the highest unemployment rates, 6.5 percent, and 6.4 percent, respectively.

Editor’s Note: It is possible that part of the reason that the unemployment rate is so low is that people have withdrawn from the workforce due to COVID fears, homeschooling, or other reasons.

In total, 17 states and the District of Columbia had unemployment rates higher than the U.S. figure of 3.9 percent, 16 states had lower rates, and 17 states had rates that were not appreciably different from that of the nation.

Nonfarm Payroll Employment

Nonfarm payroll employment increased in 17 states and was essentially unchanged in 33 states and the District of Columbia in December 2021. The largest job gains occurred in California (+50,700), Texas (+50,000), and New York (+45,300). The largest percentage increases occurred in Iowa and West Virginia (+0.8 percent each), followed by Massachusetts, Missouri, and Montana (+0.6 percent each).

Over the year, nonfarm payroll employment increased in 48 states and the District of Columbia and was essentially unchanged in 2 states. The largest job increases occurred in California (+954,400), Texas (+694,400), and Florida (+479,300). The largest percentage increases occurred in Nevada (+7.4 percent), Hawaii (+7.1 percent), and Massachusetts (+6.6 percent).

December Job Growth Fails to Meet Expectations… Again

January 8, 2022 by Tim McMahon

December 2021 Unemployment report from the Bureau of Labor Statistics (BLS)

Unadjusted U-3 was Down from 3.9% to 3.7%
Adjusted U-3 was Down from 4.2% to 3.9%
Unadjusted U-6 was Down from 7.4% to 7.2%
Labor Force Participation Unchanged at 61.9%
Unadjusted Employment rose from 150.098 million to 150.170 million

Job growth in December failed to meet expectations for the 2nd month in a row. Economists had predicted more than 400,000 jobs would be added in the month. Instead, according to the BLS, the U.S. economy added less than half that amount.

On a positive note, Seasonally adjusted unemployment fell from 4.2% to 3.9%.

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

“Nonfarm payroll employment rose by 199,000 in December, and the unemployment rate declined by 0.3 percentage point to 3.9 percent. Employment continued to trend up in leisure and hospitality, in professional and business services, in manufacturing, in construction, and in transportation and warehousing. In 2021, job growth averaged 537,000 per month. Employment has increased by 18.8 million since April 2020 but is down by 3.6 million, or 2.3 percent, from its level before the onset of the coronavirus (COVID-19) pandemic in February 2020.”

But looking at the CES report, we see…
Initially, the BLS reported 150.004 million for November, which they adjusted to 150.098 million. For December, they are reporting 150.170 million.
This is an increase of 166,000 jobs based on their original estimates or an increase of 72,000 based on their updated numbers.

Although Employment is 6.568 million Above Year-Ago Levels…

Employment numbers are still about 800,000 short of February 2020 numbers, but the Civilian Population has increased by about 2.6 MILLION people since then.

November Jobs Up But…

December 4, 2021 by Tim McMahon

November 2021 Unemployment report from the Bureau of Labor Statistics (BLS)

Unadjusted U-3 was Down from 4.3% to 3.9%
Adjusted U-3 was Down from 4.6% to 4.2%
Unadjusted U-6 was Down from 7.7% to 7.4%
Labor Force Participation Up 61.6% to 61.8%
Unadjusted employment rose from 149.226 million to 150.004 million

Although November’s job numbers are generally an improvement over October, Bloomberg called them”weird” and “the smallest jobs gain this year”. This jobs report is so weird because retail employment is DOWN by -20,400 in a month, known for increased retail employment. Market commentators are also blaming the Jobs report for Friday’s market drop.

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

“Nonfarm payroll employment rose by 210,000 in November, and the unemployment rate fell by 0.4 percentage point to 4.2 percent. Notable job gains occurred in professional and business services, transportation and warehousing, construction, and manufacturing. Employment in retail trade declined over the month.”

But looking at the CES report, we see…
Initially, the BLS reported 149.217 million for October, which they adjusted to 149.226 million. For November, they are reporting 150.004 million,
which is an increase of 787,000 jobs based on their original estimates or an increase of 778,000 based on their updated numbers.

October 2021 Unemployment Down as Expected

November 6, 2021 by Tim McMahon

October 2021 Unemployment report from the Bureau of Labor Statistics (BLS)

Unadjusted U-3 was Down from 4.6% to 4.3%
Adjusted U-3 was Down from 4.8% to 4.6%
Unadjusted U-6 was Down from 8.1% to 7.7%
Labor Force Participation unchanged at 61.6%
Unadjusted employment rose from 147.659 million to 149.217 million

These numbers are generally an improvement over last month (except Labor Force Participation), in line with market expectations. Typically October and November are up months for employment with Seasonal hiring for the Holidays.

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

“Nonfarm payroll employment rose by 531,000 in October, and the unemployment rate edged down by 0.2 percentage point to 4.6 percent.
Job growth was widespread, with notable job gains in leisure and hospitality, in professional and business services, in manufacturing,
and in transportation and warehousing. Employment declined in public education over the month.”

But looking at the CES report we see…
Originally the BLS reported 147.682 for September which they adjusted to 147.659 million. For October they are currently saying employment is 149.217 million.
which is actually an increase of 1,535,000 jobs based on their original estimates or an increase of 1,558,000 based on their updated numbers.

September Unemployment Disappointing

October 9, 2021 by Tim McMahon

September nonfarm payroll report from the Bureau of Labor Statistics (BLS)

Unadjusted U-3 was Down from 5.3% to 4.6%
Adjusted U-3 was Down from 5.2% to 4.8%
Unadjusted U-6 was Down from 8.9% to 8.1%
Labor Force Participation Down from 61.7% to 61.6%
Unadjusted employment rose from 147.028 million to 147.682 million

Although these numbers are generally an improvement over last month (except Labor Force Participation), the market expected better. Bloomberg was projecting jobs growth of roughly 2.5x what we actually got.

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

Nonfarm payroll employment rose by 194,000 in September, and the unemployment rate fell by 0.4 percentage point to 4.8 percent.
Notable job gains occurred in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing.
Employment declined in public education over the month.

But looking at the CES report, we see…
Initially, the BLS reported 146.856 for August, which they adjusted to 147.028 million. For September, they are currently saying employment is 147.682 million.
This is an increase of 826,000 jobs based on their original estimates. Or an increase of 654,000 based on their updated numbers.

However, the market considers this a “much softer-than-expected September nonfarm payroll report” since Bloomberg was projecting 500,000 new jobs instead of the CPS Seasonally Adjusted 194,000.

The labor force participation rate dipped to 61.6% from August’s 61.7% rate, compared to forecasts of an increase to 61.8%.