The Government’s June Employment Report
The Runup:
- ADP’s National Employment Report came in at -79,000 seasonally adjusted private nonfarm payroll jobs. Their +40,000 from April was revised up to -15,000.
- Prognosticators at this AP/CNBC link are guessing that BLS’s Employment Situation report would come in today at -60,000 seasonally adjusted jobs (private and government), with the unemployment rate unchanged at 5.5%.
- This MarketWatch report from our good pal Rex Nutting has predictions of -40,000 and -50,000, and doesn’t predict the unemployment rate.
- One thing yours truly will be keeping an eye on, especially since no one else will, is the BLS estimate of how many jobs were actually added in June, as opposed to the seasonally adjusted number that gets everyone’s attention. Revisions to actual adds in May and April also deserve attention. Here’s how it looks so far this year compared to previous years:
- I’m rooting for June to have about 500,000 net adds, which would I believe lead to a lower-than-predicted seasonally adjusted job loss, but bracing for the worst.
8:30 a.m. — The News (BLS report will be here when released; details below will be updated after the jump ASAP after the report is released):
Nonfarm payroll employment continued to trend down in June (-62,000), while the unemployment rate held at 5.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment continued to fall in construction, manufacturing, and employment services, while health care and mining added jobs. Average hourly earnings rose by 6 cents, or 0.3 percent, over the month.
Other quick details:
- Revision to May’s original - 49,000 — now -62,000, down by 13,000
- Revision to April’s once-revised -28,000 (originally -20,000) — now -67,000, down by 39,000
- Total change including prior-month revisions is -114,000 (-62-13-39)
- Actual jobs added in June — +241,000
- Revision to May’s actual jobs added of +648,000 — up 5,000 to +653,000
- Revision to April’s once-revised actual jobs added of +712,000 — down 15,000 to +697,000
- Total change in actual jobs added, including prior-month revisions is +231,000 (241+5-15)
Unemployment Rate Highlights:
- Unemployment rate (NOT seasonally adjusted) — 5.7% (was 5.2% in May, 4.7% in June 2007)
- June change in the number of unemployed (seasonally adjusted) — up 12,000 (from 8.487 million to 8.499 million)
- June change in the number of unemployed (NOT seasonally adjusted) — up 857,000 higher (from 8.076 million to 8.933 million)
- African-American unemployment rate (seasonally adjusted) — 9.2% (was 9.7% in May, 8.4% in June 2007)
- African-American unemployment rate (NOT seasonally adjusted) — 9.8% (was 9.4% in May, 9.0% in June 2007)
- People working per the unemployment report (seasonally adjusted) — 145.891 million, down 155,000 (was 146.046 million in May)
- People working per the unemployment report (NOT seasonally adjusted) — 146.649 million, up 723,000 (was 145.926 million in May)
Comments:
9:15 a.m. —
- Here’s the rundown of actual jobs added. June’s number is a combination of +638 in the private sector and - 397 in government (vs. +916 and -414 the year before):
- So jobs added in the past five months of this year have been 2.712 million, vs. 3.839 mil, 4.122 mil, and 4.359 mil in 2007, 2006, and 2005, respectively. That’s clearly unacceptable.
- The press will, of course, report today’s result in the usual Armageddon-like manner, as if thousands were thrown out on the streets, but a sector-by-sector look reveals that every private-sector category picked up employees (about 890,000 in total — again, not enough vs. previous years) except education and health services, which lost 234,000 employees in June. That, as you might expect, is a normal summertime thing.
But the press might be right about the Armageddon thing, but for the wrong reasons. I’m going to wait until the ISM Non-Manufacturing Index (NMI) comes in before commenting further.
10:10 a.m. — NMI came in showing contraction. After the employment numbers came in, I was afraid we were going to see this.
This calls for a separate post, which is coming.
Here it is: “Welcome to the POR (Pelosi-Obama-Reid) Economy: A Washington-Driven Recession or Downturn May Have Begun.”
I note two interesting nuances in the numbers. While unemployment for adult men went up, adult women went down. The same occurred for hispanics (up) versus blacks (down).
I have to wonder if this might be a continuing indication of the illegals being pushed out. Now they aren’t supposed to be drawing unemployment benefits… But they still might be counted in any event. Doesn’t the ADP report in essence only report on “legal” jobs due to the manner in which the info is collected? i.e. jobs on the books
Comment by dscott — July 3, 2008 @ 9:20 am
#1, ADP is people getting payroll checks. If illegals are getting on payroll with bogus, stolen, or repeat SocSec numbers, they’re not in a position to catch it.
Although …. wouldn’t it be fun (probably not legal) to see if a given SocSec number shows up at three or more companies, or companies in different towns far from each other? Obvious red flags.
Can’t tell about the illegals leaving.
Comment by TBlumer — July 3, 2008 @ 9:48 am
But there is also the issue of under the table jobs that may or may not be worked by an illegal. Given the manner in which BLS gathers their info, people who are employed “off the books” as far as the IRS is concerned are potentially counted (just ignoring the immigration status for the moment). While ADP counts only those jobs that are on the books. Wouldn’t that account for much of the descrepany between the BLS and ADP figures?
E.g. let’s say I (a citizen) worked for a plumbing company on a cash basis and was fobbed off as a misc. expense, ADP doesn’t know the plumber has the employee, however, BLS might via the survey. Now let’s say, the plumber drops me as a misc. expense, then I might show up on the BLS survey as unemployed or not working.
Comment by dscott — July 3, 2008 @ 10:12 am
#3, good points for A, but I don’t think for B. I think BLS will have higher employed numbers in the “A” reports (for the unemployment rate) because of what you say, but in theory the jobs numbers in the “B” reports should be (mostly) in sync, unless you think someone responding to a “B” inquiry is going to include off-the-books people in the numbers given to BLS (doubtful).
Comment by TBlumer — July 3, 2008 @ 10:27 am
Is the inquiry the BLS makes with both households or strictly with employers? I got the impression they were surveying households as well which would in effect count off the books jobs and illegals and also the unemployed (Not in Workforce).
Comment by dscott — July 3, 2008 @ 10:51 am