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Friday, August 2, 2013

The July 2013 Jobs Report

Here is the July 2013 employment situation report from the BLS:

Key Highlights:

- The unemployment rate fell to 7.4%. Non-farm employers added 162,000 new jobs.

- The number of unemployed persons decreases from 11.8 million in June to 11.5 million in July.

- The civilian labor force participation rate decreased slightly from 63.5% in June to 63.4% in July.

- The "not in labor force" count (those who have no job and have stopped looking for work) increased from 89,717,000 in June to 89,957,000 in July, a decrease of 240,000.

- The civilian labor force dropped from 155,835,000 to 155,798,000, or 37,000.

- The number of persons employed for part-time economic reasons (those that are considered part-time involuntary workers) remained flat a 8,200,000 in July.

- Average hourly earnings decreased by 2 cents. The 12-month average for hourly earnings have risen at a 1.9% yearly rate.

- May's jobs created numbers were revised downward from 195,000 to 176,000, while June's jobs created numbers were revised downward from 195,000 to 188,000.

My quick take:

This is relatively disastrous. Most economists predicted a "strong" jobs report with employers expanding their payrolls by between 180,000 - 200,000 workers. Not only did this fall 11% - 23% below expectations, but wages fell, and the number of people who stopped looking for work rose again. The total civilian labor force participation rate decrease to 63.4%, a number that represents the unemployment situation of 1979. On top of that, wages fell, and the number of jobs created for the previous two months were revised downward by about 26,000.

What will the media say? Naturally, they will tout that the unemployment rate fell to 7.4%. But when we look at the data in the report itself, is there really anything at all to cheer about? I've stated this many times; we need 150,000 new jobs per month in job growth just to account for new employees entering the workforce. 162,000 jobs simply doesn't cut it. We also need 350,000 - 400,000 new jobs created, month over month, mind you, to bring the rate down to an acceptable level (< 6.0%) within the next 3 years.

In short, this jobs report is heartbreaking. It's low-level mediocrity at its best. There is very little in this report with respect to positive news, and if the "positive" news broadcast by the media is something like, "well, at least we didn't lose jobs" or "the rate fell to 7.4%%" without giving the full context of the report, frankly, that's pathetic... just like this "recovery."