Today's Jobs Report is More Mixed than You Might Think

Mish Shedlock |

Today's jobs report (for June) once again showed a huge divergence between the household survey and the establishment survey.

Household survey employment fell by 56,000 while the establishment survey shows a gain of 233,000 jobs. The labor force declined by 432,000 and that explains the drop in the unemployment rate to 5.3% from 5.5%. The report was weaker than it looks, due to significant downward revisions in April and May totaling 60,000. May was revised to 254,000 from 280,000 and April to 187,000 from 221,000. 

Part-Time Employment +372,000

Of note in the Household Survey, voluntary part-time employment rose by 519,000 while part-time for economic reasons declined by 147,000. That means there is a net increase in part-time employment of 372,000. 

BLS Jobs Statistics at a Glance 

Nonfarm Payroll: +233,000 - Establishment Survey

  • Employment: -56,000 - Household Survey

  • Unemployment: -375,000 - Household Survey

  • Involuntary Part-Time Work: -147,000 - Household Survey

  • Voluntary Part-Time Work: 519,000 - Household Survey

  • Baseline Unemployment Rate: -0.2 to 5.3% - Household Survey

  • U-6 unemployment: -0.3 to 10.5% - Household Survey

  • Civilian Non-institutional Population: +208,000

  • Civilian Labor Force: -432,000 - Household Survey

  • Not in Labor Force: +640,000 - Household Survey

  • Participation Rate: -0.3 to 62.6 - Household Survey

June 2015 Employment Report 

Please consider the Bureau of Labor Statistics (BLS) Current Employment Report. Total nonfarm payroll employment increased by 223,000 in June, and the unemployment rate declined to 5.3 percent. Job gains occurred in professional and business services, health care, retail trade, financial activities, and transportation and warehousing. 

Unemployment Rate - Seasonally Adjusted

Chart_1_Unemployment_Rate_7_2.jpg

Nonfarm Employment

Nonfarm_Employment_7_2.jpg

Nonfarm Employment Change from Previous Month by Job Type

Employment_in_Total_Nonfarm_7_2.jpg

Hours and Wages

Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours. Average hourly earnings of production and non-supervisory private workers rose $0.02 at $20.99. Average hourly earnings of production and non-supervisory private service-providing employees rose $0.01 at $20.78. For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

The Birth-Death Model 

Starting January 2014, I dropped the Birth-Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth-Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment

Table_15_BLS_Alternate_Measures_of_Unemployment_7_2.jpg

Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation, not to be confused with "good" approximation.

The official unemployment rate is 5.2%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 10.5%. Of course, both numbers would be far higher still, were it not for millions dropping out of the labor force over the past few years. Some of those dropping out of the labor force retired because they wanted to retire, but the rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.


For more of Mish's insights and opinions on markets in the US and across the globe, follow this link to Mike Shedlock’s blog. 

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