The July Employment Situation (080213): Unemployment at 7.4%; 162K SA Jobs Added; Prior Months Slightly Reduced; Trend to Part-Time Work Continues

Predictions:

• Bloomberg — “America’s jobless rate probably declined in July to match an April reading that was the lowest since 2008, economists said before today’s Labor Department report.” Translation: 7.5% unemployment, no estimate of jobs.
• Reuters — “A Reuters survey pointed to an increase of 184,000 in nonfarm payrolls, with the jobless rate seen dropping to 7.5 percent from 7.6 percent.”

Not seasonally adjusted assessment:

July is a very quirky month. Overall jobs losses are usually pretty big because of summer vacations in education. The private sector has been all over the map during the past decade.

A truly recovering economy with so many people on the sidelines and a still too-high unemployment rate should show overall losses no greater than 1.05 million jobs, and should pick up at least 175,000 in the private sector. Those are the acceptability benchmarks for July, regardless of how the seasonally adjusted numbers come out. If those benchmarks seems too ambitious, look at the past three years, and ask yourself if the economy was good in any of them. Of course, it wasn’t. Today’s numbers need to be much better than those seen in 2010, 2011, and 2012.

Other items to be alert for: Part-time vs. full-time job growth (arguably as important as the number of jobs added); workforce participation; teen unemployment, and the proportion of jobs taken by teens; whether the labor force grows or contracts; any changes in average hours worked; the number of employees added at temporary help services.

The report will be here at 8:30 a.m.

Yours truly won’t have any time for detailed analysis or review of others’ work until late this evening.

HERE IT IS (Full HTML version): The proverbial mixed bag –

Total nonfarm payroll employment increased by 162,000 in July, and the unemployment rate edged down to 7.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade, food services and drinking places, financial activities, and wholesale trade.

Household Survey Data

Both the number of unemployed persons, at 11.5 million, and the unemployment rate, at 7.4 percent, edged down in July. Over the year, these measures were down by 1.2 million and 0.8 percentage point, respectively.

Among the major worker groups, the unemployment rates for adult women (6.5 percent) and blacks (12.6 percent) declined in July. The rates for adult men (7.0 percent), teenagers (23.7 percent), whites (6.6 percent), and Hispanics (9.4 percent) showed little or no change. The jobless rate for Asians was 5.7 percent (not seasonally adjusted), little changed from a year earlier.

… Establishment Survey Data

Total nonfarm payroll employment increased by 162,000 in July, with gains in retail trade, food services and drinking places, financial activities, and wholesale trade. Over the prior 12 months, nonfarm employment growth averaged 189,000 per month. (See table B-1.)

Retail trade added 47,000 jobs in July and has added 352,000 over the past 12 months. In July, job growth occurred in general merchandise stores (+9,000), motor vehicle and parts dealers (+6,000), building material and garden supply stores (+6,000), and health and personal care stores (+5,000).

Within leisure and hospitality, employment in food services and drinking places increased by 38,000 in July and by 381,000 over the year.

… The change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported.

Immediate reax and quick numbers:

• Looks like a large portion of the adds were in lower-paying and part-time positions, regardless of what the Household Survey detail might say. (see below)
• The prior-month write downs mean that net additions were +136K this month. That is a huge downward swing from June. (But see below.)
• The civilian labor force shrunk by 37K, and the participation rate dropped to 63.4%, and the “not in labor force” number is just shy of 90 million, an all-time record.
• After disappearing some time ago following the “Mancession,” the differential between Male and Female 16+ unemployment is now 0.7 points (7.7% vs. 7.0%).
• The more inclusive Household Survey shows only 92K full-time jobs added, vs. 174K part-time. In two months, that’s +148K FT and +534K part-time. In four months, that’s +187K FT and +791K part-time. Don’t even try to tell me, as economists like Mark Zandi continue to insist, that there isn’t a trend towards part-time work.
• I like how BLS said temp services “changed little.” It added 7.7K, or well over 4% of the total in an industry that’s about 2% of the workforce.
• ADP has 22K construction adds. BLS had 6k lost.

Finally, the not seasonally adjusted changes were 1.113 jobs lost overall and 106,000 in private-sector gains. Those are short of the benchmarks, but it looks like Team Obama caught bad breaks in the seasonal adjustments this time around. Based on comparisons to prior years, you could make a case that it would have been reasonable to expect seasonally adjusted results of about +210K overall and about +230K in the private sector.

It didn’t happen. Too bad, so sad, guys.

It will be interesting to see what the press does to say that the SA numbers aren’t so bad without mentioning the NSA ones.

But overall, the month was once again bad in terms of workforce malaise and the shift to part-time workers, but the situation with payroll jobs added wasn’t as mediocre as indicated.

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UPDATE: Zero Hedge — “Obamacare Full Frontal: Of 953,000 Jobs Created In 2013, 77%, Or 731,000 Are Part-Time.”