The August Employment Numbers (090707)

So the headlines, appropriately, will be “August Report: 4,000 Fewer Jobs.”

The question is whether Old Media will notice the prior month revisions in the Bureau of Labor Statistics report (July – down 24,000, from 92,000 to 68,000; June, down 57,000, from 126,000 to 69,000). If that news gets a lot of play, it will be a stark contrast to how reporters have handled positive prior-month revisions in previous BLS reports.

The apparently bad news bottom line is that (based on what we know and pending future revisions) there were 85,000 fewer people working when BLS did their survey than were working 30 days earlier.

I say “apparently bad news” because I think readers should ponder these points:

• Although teenage unemployment shot up from 15.2% to 16.1%, African-American unemployment dropped again, from a much larger pool of workers than teens. This time seasonally adjusted African-American unemployment fell from 8.0% to 7.7%. After July’s drop of 0.5%, that’s an 0.8% drop in two months; August’s not seasonally adjusted “raw numbers” rate fell a stunning 1.2%, from 8.9% to 7.7%.
• At 7.7% seasonally adjusted, African-American unemployment is at its lowest level since February 2001 (select the appropriate table at this link). In the late 1990s and 2000, that unemployment rate came in lower in seven different months, but never lower than 7.0%. African-American unemployment has shown similar behaviors in previous summers, but those were summers where jobs were expanding at a very nice clip, which is not what has been happening during the past few months.

• Then look at this –

As you can see, the civilian labor force, according to the Household Survey, dropped by 340,000 during the month of August. The number of unemployed also dropped by 24,000, which is why the overall unemployment rate of 4.6% stayed the same. Survey questioners, as I understand it, do not inquire as to the citizenship status of those they speak with.

It’s going to take more than a month or two to get a grip on this, but I have to wonder if on the whole we’re seeing African-American and perhaps other low-skilled citizen workers doing some of the jobs illegal immigrants, who may be a significant element of the hefty “Not in labor force” increase, had been doing.

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UPDATE: Since other reports coming out during this week (to be discussed later) indicate a growing economy, I think the stock market is overreacting to the jobs report.