Participation Rate

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.

Key July Employment and Unemployment Numbers

August 4, 2018 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released their monthly employment survey results for the month of July on Friday August 3^rd .

The current “Seasonally Adjusted” Unemployment Rate for July (released August 3^rd) is 3.9% down from 4.0% last month. It was 3.8% in May and 3.9% in April. Unemployment was 4.1% from October 2017 through March 2018. Seasonally adjusted unemployment bounced around between 4.3% and 4.4% from April through October 2017, after declining from 4.8% in January 2017.

Typically Unemployment levels are worse in June and July so seasonally adjusting takes that into consideration. If we look at Unadjusted Unemployment we see that in 2017 it jumped from 4.1% in May to 4.5% in June at the same time the Seasonally Adjusted numbers simply went from 4.3% to 4.4%.

Key July Employment and Unemployment Numbers

Adjusted U-3 Unemployment- 3.9% down from 4.0% in June but up from the 3.8% in May, 3.9% in April but still Below the 4.1% October – March.
Unadjusted U-3 Unemployment- 4.1% down from 4.2% in June up from 3.6% in May, 3.7% in April and 4.1% in March.
Unadjusted U-6 Unemployment- 7.9% down from 8.1% in June, up from 7.3% in May, 7.4% in April and from 8.1% in March and 8.6% in February.
Employment 148.901 million. BLS adjusted June employment up from 148.912 million as released to 150.057 million.
NOTE: On 8/3/2018 with the release of the new July numbers the BLS adjusted the June LFPR down to 62.9% from a recent high of 63.4%

See Current Unemployment Chart for more info.

Employment by Sector

The employment “bubble chart” gives us a good representation of how each sector of the economy is doing (employment wise). As we can see from the chart below [Read more…] about Key July Employment and Unemployment Numbers

Over a Million New Jobs Not 211,000

May 5, 2017 by Tim McMahon

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

“The unemployment rate changed little over the month but, at 4.4 percent, matched the pre-recession low reached in 2007. The number of unemployed persons, at 7.1 million, also changed little in April.“

Today’s Bureau of Labor Statistics (BLS) Commissioner’s Report says, “Nonfarm payroll employment increased by 211,000 in April, and the unemployment rate, at 4.4 percent, was little changed. Thus far this year, monthly job gains have averaged 185,000, in line with average monthly job growth in 2016. In April, job gains occurred in leisure and hospitality, health care and social assistance, financial activities, and mining.”

But we have to remember that typically employment increases in April. So what the BLS Commissioner is saying is that 211,000 more jobs than average were created. In layman’s terms, unadjusted employment was 144.953 million in March and 145.979 in April for a net gain of 1,026,000 jobs.

Employment Growth Bubbles

In the above chart we see the various sectors of employment. The size of the bubble represents [Read more…] about Over a Million New Jobs Not 211,000

Why the U.S. Isn’t at “Full Employment” Yet

May 5, 2017 by Tim McMahon

The news is bristling with excitement as all the major media outlets are jumping on today’s employment numbers hot off the Bureau of Labor Statistics presses. The BLS reported that the Seasonally Adjusted U-3 unemployment rate was just 4.4% and the unadjusted broader based U-6 was just 8.1%.

In response to all this good news The New York Times said, “We’re Getting Awfully Close to Full Employment” and The Wall Street Journal trumpeted “Jobs Report: This Is What Full Employment Looks Like” so who am I to throw cold water on their parade? Well, at least I’m not the only one to have my doubts. Jared Bernstein at The Washington Post thinks that the current low inflation level is a factor that may indicate that we aren’t quite there yet. So I’m adding my own two-cents with the following chart. We regularly publish the U-6 minus U-3 chart which shows the differential between the ordinary unemployed U-3 and the bottom of the barrel unemployed U-6. By definition, in order to be at “full-employment” everyone who wants a job has to have one. That doesn’t mean Zero unemployment because there is a bit of friction in the system and so when people change jobs they are temporarily “unemployed” so there will always be some. Historically, this was assumed to be around 3% unemployment. So as the U-3 unemployment approaches 3% the U-6 people get drawn into the market. They may not have the skills or the ambition or the whatever but now they can find a job because companies are desperate.

So by looking at the U-6 minus the U-3 we can get a very good picture of when we are nearing “full employment”. So let’s look at that chart. [Read more…] about Why the U.S. Isn’t at “Full Employment” Yet