Yesterday's actions by ECB were dramatic and daring efforts to get banks to lend. It will be most interesting to see how the Fed reacts to this.
Inside the BLS Employment Situation Report
This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which includes the 12th of the month.
Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.
- Nominal Nonfarm jobs was +217,000. (E). The two previous months' gains were revised to +282,000 and +203,000. Those had been +288,000 and +203,000. That is a loss of 6,000 for those 2 months from the previous report making the net gain of +217,000 in jobs since the last report.
- the size of the civilian noninstitutional adult population increased by 183,000 to 247,622,000 (H).
- 192,000 more people were in the labor force last month. (H)
With a labor participation rate of 62.8% 114,900 more jobs were necessary to keep pace with population growth. We had 102,100 more jobs added than that. (H) The Employment/Population ratio was flat at to 58.9%.
The Labor Participation Rate was flat at 62.8%. It was 63.4% a year ago. It peaked at 67.3% in April 2000.
The civilian noninstitutional population is 2,259,000 (H) more than 12 months ago. With a labor participation rate of 62.8% we require 1,441,000 more jobs in the past 12 months to keep pace with population growth. We have 1,895,000 (H) more folks working. Real (population adjusted jobs growth in the past 12 months is 458,000.
- Real (population adjusted) job growth last month was 102,100. This accounts for the changes for the 2 previous months.
- the Unemployment Rate was flat at 6.3%. (B)
- Average hourly earnings was $24.38 up from $24.33 the previous month. (E)
- Average work week was 34.5 hours the same as the previous month. (E)
- Private jobs were +216,000. Government jobs were +1,000. (E)
-Good producing jobs were +18,000. The two previous months were revised to +46,000 and +21,000 (E)
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was flat at 62.8%. It was 63.4% a year ago. (H) This, not the unemployment rate, is the number which should get everyone's attention. It is this 62.8% of the adult noninstitutionalized population who get pay checks and contribute to GDP. The Labor Participation Rate is the lowest it has been since January 1978. Until 1970 the Participation Rate was almost always under 60.0. It started to increase as more women joined the labor force and as boomers started working. My concern in that the enormous obligations of Medicare and Social Security will be difficult to meet with a declining Labor Participation Rate.
Last month BLS measured 4 sets of people entering or leaving the jobs market:
- Job losers and persons who completed temporary jobs was 5,018,000 down 218,000 from previous month's Job Losers and down 1,076,000 year-on-year. (H) This is a bright part of the report.
- Job leavers was 875,000. This includes anyone who retired or voluntarily left working. This up 91,000 from previous month and down69,000 year-on-year. (H)
-Reentrants was 2,857,000. Reentrants are previously employed people who were looking for a job and found one. This was +237,000 from the previous month and -469,000 year-on-year.(H)
-New entrants were 1,062,000. These are people who never worked before and who are entering the labor force for the first time. This was +19,000 from previous month and -195,000 year-on-year.
One line in the BLS Report is termed "people employed part-time for economic reasons." These are people who want to work full time but their employer, for whatever reason, decide to employ them only part-time. In this month's report there were 196,000 fewer people working part-time. This is a positive for the jobs market.
The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:
- 217,000 more people are working.
- 195,000 more people are in the civilian labor force.
The unemployment rate was flat.
Jobs growth trend was down, the Unemployment Rate was flat and the Labor Participation Rate is the lowest since January 1978. There are 2 stories here: 1) we are adding jobs at a modest clip and 2) we are not adding jobs at a pace sufficient to generate tax revenue to meet the obligations of Medicare and Social Security. This is a better report than last month but a very ill omen for our ability to fund those "entitlements."
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