August 6, 2010

The July Employment Situation Report (080610)

Filed under: Economy,Taxes & Government — Tom @ 8:09 am

The run-up:

  • ADP reported 42,000 private sector jobs added on Wednesday morning.
  • Bloomberg — “U.S. employers cut 65,000 jobs last month, adding to a decline of 125,000 in June, according to the median prediction of 84 economists surveyed by Bloomberg before today’s release.” The report doesn’t say how much of that represents the remainder of the Census wind-down, or what the estimate is for the private sector.
  • Reuters does have a breakdown — “Economists polled by Reuters expected the U.S. Labor Department report … to show a drop of 65,000 in non-farm payrolls in July as temporary U.S. Census Bureau jobs evaporated. Private employers are expected to have added 90,000 jobs.”
  • In a brief report included in a collection of unrelated items, the Associated Press only deals with the private jobs number — “Companies are forecast to have added a net total of 90,000 private-sector jobs in July, according to economists surveyed by Thomson Reuters. That’s not nearly enough to bring down the unemployment rate, which is expected to rise to 9.6 percent from 9.5 percent.”

The real number needed:

Here’s where things on the ground stood in the private sector through June –

PrivateSectorThrough0610

Last month, I suggested that the acceptability threshold for jobs added on the ground was 950,000 jobs added. The 863,000 added (pending revision today and in August) fell a bit short of that.

Based on what really happened in July 2004-2007 (average loss of 75,000 jobs), today’s acceptability benchmark is 100,000 jobs lost on the ground. I have a feeling that today’s number will be better than that, partially on a hunch, but also partially because General Motors kept its people working through all of July (meaning that many of its suppliers might have done the same). Auto plants often shut down during the summer for a couple of weeks.

Today’s seasonally adjusted private sector number may be a bit suspect because it has two bad years in the calculation, because July 2008 and 2009 were both parts of the POR (Pelosi-Obama-Reid) Economy. This may cause a mediocre performance in the real, not seasonally adjusted world to look artificially good when seasonally adjusted (Update: It went the other way; the NSA number is really good, and the SA number masks it; see below).

The report will be here at 8:30. … Here is the first paragraph:

Total nonfarm payroll employment declined by 131,000 in July, and the unemployment rate was unchanged at 9.5 percent, the U.S. Bureau of Labor Statistics reported today. Federal government employment fell, as 143,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment edged up by 71,000.

That’s somewhat short of expectations on the jobs side, while the unemployment rate didn’t get worse.

As noted above, the proof will be in the actual number.

And that number is … pretty darned good — so good that I wonder if the press is all of a sudden going to discover the virtues of looking at actual results instead of the ones that are seasoned:

BLSprivateSectorNSAthru0710

June was revised down by 69K. May went up by 14K. The +91K seen on the ground in July is 191,000 jobs better than the acceptability benchmark set before the report came out. That’s impressive. The Birth/Death model isn’t skewing things either. The GM factor I cited earlier can’t be more than a small part of the improvement. Never mind what the seasonally adjusted number is — If the not seasonally adjusted +91K holds in subsequent revisions, or even stays above zero, it will be the first legitimately strong monthly private sector performance since the POR Economy began. It will take a long, long time to gain back what was lost, but perhaps the worst of our long national nightmare is finally beginning to end.

UPDATE: This Wall Street Journal report is downbeat –

The U.S. economy shed more jobs than expected in July while the unemployment rate held steady at 9.5%, a further sign the economic recovery may be losing momentum.

After the worst recession in decades, the recovery that began in July 2009 has recently been losing momentum, but it’s hard to say if it’s just a temporary slowdown or if the economy could start to contract again. The Federal Reserve may consider taking steps to support the economy when officials meet next Tuesday. Some worry that with unemployment still so high and consumer prices recently dropping, the U.S. economy runs the risk of falling into a Japan-like deflationary trap of very slow growth and falling prices.

The report, as press reports usually do, assumes that the seasonally adjusted data represeny what really happened on the ground. Readers here know that isn’t so.

Look, I’m not averse to being negative when it’s called for, but this isn’t one of those times. Looking back, the +91K actual private sector performance is the best for any July since 1999. One month doesn’t make or break the economy, but the Establishment Survey’s July news was very good, and got seasonalized away.

UPDATE 2: On the Household Survey side (the basis for the unemployment rate), the improvement isn’t as clear, but the trend towards improvement is:

BLShouseSurveyEmploymentNSA0710

BLS doesn’t break out the private sector in its Household Survey reports, so this look-see is a bit more difficult. The +252K performance in July 2010 clearly trails the average of July 2004-2007, but if the actual Census let-gos were factored in, it would come pretty close.

It is still troubling that the number of people entering the labor force didn’t go up as much as it did during 2004-2007 (+503,000 vs. a 701,000 average; after seasonalization, BLS shows a contraction of 181,000). But if the Establishment Survey results hold, that will probably change for the better in short order.

Positivity: British soldier shot in Afghanistan is saved by his Rosary … just like his great-grandfather in WWII

Filed under: Positivity — Tom @ 7:44 am

From Afghanistan:

Last updated at 8:01 AM on 3rd August 2010

A soldier who stood on a landmine and was shot in the chest in Afghanistan is convinced a rosary saved his life in exactly the same way as his great-grandfather towards the end of the Second World War.

Glenn Hockton, 19, who is now home from a seven-month tour of duty with the Coldstream Guards in Helmand Province, was on patrol when his rosary suddenly fell from his neck.

His mother Sheri Jones said today: ‘He felt like he had a slap on the back. He bent down to pick up his rosary to see if it was broken. As he bent down he realised he was on a landmine.’

Glenn had to stand there for 45 terrifying minutes while his colleagues successfully managed to get to him.
Mrs Jones, from Tye Green, Essex, said she was physically sick when her son rang to tell her of his ordeal.

His great-grandfather Joseph ‘Sunny’ Truman also credited a rosary with saving his life in a World War II blast that killed six members of his platoon.

He was with the Royal Regiment of Fusiliers and after being captured towards the end of the war, he and other prisoners were forced to march away from the advancing Allied armies.

Mrs Jones, 41, recalled: ‘He was walking across a field with half a dozen of his platoon. He bent down to pick something up and was the only one to survive a sudden bomb blast. He had picked up a rosary.’

Before Glenn was deployed to Afghanistan, she said he asked for a rosary to take with him.

His mother and stepfather Danyal Jones have also kept a bullet which embedded itself in Glenn’s body armour when he was shot on a separate occasion. He was winded, but otherwise he was unhurt. …

Go here for the rest of the story.