August Employment Situation Summary (090415): 173K Jobs Added (Arguably Overstated), Unemployment Rate Drops to 5.1 Percent, Malaise Continues

Today’s report is supposedly the Fed’s make-or-break decider on whether the U.S. economy can withstand any kind of interest rate. (Over six years into an alleged “recovery,” the economy is still so fragile that they’re not sure.)

Predictions:

• Briefing.com, per Yahoo Business — 225,000 jobs added, 5.4 percent unemployment rate
• “Markets, per Yahoo Business — 217,000 jobs added, 5.2 percent unemployment rate
• Associated Press — 217,000 jobs added, 5.2 percent unemployment rate
• Bloomberg — 217,000 jobs added, 5.2 percent unemployment rate

Not seasonally adjusted benchmarks:

Don’t have a chane to put up the graphics before the report comes out, but here are the benchmarks for the actual job additions we need to see for August before the Bureau of Labor Statistics seasonalizes the data. Achieving these would signal that the job market has genuinely begun to break out of its 5-1/2 years of relatively mediocre performance compared to past recoveries:

• Total nonfarm payrolls — +500,000. This would be 62,000 higher than the 438,000 seen in August 2013. (Note: this revised after initial posting because yours truly was looking at the wrong table, but the benchmarking goal remains about equally as ambitious.)
• Private sector — +275,000. This would be 66,000 higher than the 209,000 seen in August 2013.

The benchmarks are a bit lower than what I’d really like to see,

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

HERE IT IS (permanent link) — Need to look deeper, but the topside numbers indicate that the malaise continues unabated:

Total nonfarm payroll employment increased by 173,000 in August, and the unemployment rate edged down to 5.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and social assistance and in financial activities. Manufacturing and mining lost jobs.

Household Survey Data

In August, the unemployment rate edged down to 5.1 percent, and the number of unemployed persons edged down to 8.0 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.0 percentage point and 1.5 million, respectively.

Among the major worker groups, the unemployment rate for whites declined to 4.4 percent in August. The rates for adult men (4.7 percent), adult women (4.7 percent), teenagers (16.9 percent), blacks (9.5 percent), Asians (3.5 percent), and Hispanics (6.6 percent) showed little change in August.

… In August, the civilian labor force participation rate was 62.6 percent for the third consecutive month. The employment-population ratio, at 59.4 percent, was about unchanged in August and has shown little movement thus far this year.

… Establishment Survey Data

Total nonfarm payroll employment rose by 173,000 in August. Over the prior 12 months, employment growth had averaged 247,000 per month. In August, job gains occurred in health care and social assistance and in financial
activities. Employment in manufacturing and mining declined.

Health care and social assistance added 56,000 jobs in August. Health care employment increased by 41,000 over the month, with job growth occurring in ambulatory health care services (+21,000) and hospitals (+16,000). Employment rose by 16,000 in social assistance, which includes child day care services and services for the elderly and disabled. Over the year, employment has risen by 457,000 in health care and by 107,000 in social assistance.

… The change in total nonfarm payroll employment for June was revised from +231,000 to +245,000, and the change for July was revised from +215,000 to +245,000. With these revisions, employment gains in June and July combined were 44,000 more than previously reported. Over the past 3 months, job gains have averaged 221,000 per month.

The prior-month pickups are helpful, but (again pending a look at the raw numbers) they serve to show that August saw things weaken.

Not Seasonally Adjusted Benchmarks Comparison: Whoa, this is really ugly —

• Total nonfarm payrolls — Benchmark: +500,000. Actual: +258,000. That’s the worst raw figure since 2010.
• Private sector — Benchmark: +275,000. Actual: +71,000. That’s also the worst raw figure since 2010 — by over 100,000..

I’ll put up the revised tables in a bit, but I can say that the seasonally adjusted results (+173K overall and +140K for the private sector) both look overstated by 50K-75K. How convenient that Team Obama catches a (manipulated?) “break” just before the Labor Day weekend.

I’ll have other observations shortly.

HERE WE GO (references are to seasonally adjusted figures unless otherwise noted):

• As usual, the unemployment rate dropped because the labor force shrunk by 41,000. The “not in labor force” figure is now an all-time record 94.031 million.
• While the white unemployment rate dropped from 4.6 percent to 4.4 percent. The black unemployment rate rose to 9.5 percent from 9.1 percent.
• After 94 long months, seasonally adjusted full-time employment (122.024 million) finally exceeded the 121.875 million seen in November 2007. This is a volatile stat, so don’t be surprised if it falls back below the 2007 high during the next month or two.
• Here’s a stunner — employment in the 25-54 age group (about 65 percent of the workforce), aka the “prime working years,” has only increased by 1.001 million in the past year (from 95.627 million to 96.628 million). Meanwhile, employment among those who are 55 and over (about 22 percent of the workforce) is up by even more (from 32.395 million to 33.423 million).
• Establishment Survey job additions have the usual additions to the temp workforce (+10.7K) and Food and Drinking Places (+26.1K). Meanwhile employment in mining (-10K) and manufacturing (-17K) fell.