by Bill McBride on 8/05/2011 10:22:00 AM
Friday, August 05, 2011
This was an improvement over May and June, but still a weak report. As I noted yesterday, the BLS survey reference week includes the 12th of the month (the 2nd full week of July), and that was before the economy froze up due to the D.C. debate, and also before the European crisis really flared up again. That might be why this report was a little better than expected.
There were more jobs added in July (117,000 total and 154,000 private sector). The unemployment rate decreased from 9.2% to 9.1%, and the participation rate declined to 63.9%. This is the lowest participation rate since the early ‘80s. Note: This is the percentage of the working age population in the labor force.
The employment population ratio fell to 58.1%, also a new cycle low.
U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, decreased to 16.1%; barely off the high for the year.
The BLS revised up the May and June payrolls, showing a gain of 56,000 more jobs were created than previously reported.
The average workweek was unchanged at 34.3 hours, and average hourly earnings increased. "In July, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents, or 0.4 percent, to $23.13. Over the past 12 months, average hourly earnings have increased by 2.3 percent."
Through the first seven months of 2011, the economy has added 930,000 total non-farm jobs or just 133 thousand per month. This is a better pace of payroll job creation than last year, but the economy still has 6.8 million fewer payroll jobs than at the beginning of the 2007 recession.
There are a total of 13.9 million Americans unemployed and 6.2 million have been unemployed for more than 6 months. Very grim numbers.
Even though this was an improvement over May and June, overall this was a weak report and reminds us that unemployment and underemployment are critical problems in the U.S.
The following graph shows the employment population ratio, the participation rate, and the unemployment rate.
Click on graph for larger image in graph gallery.
The unemployment rate decreased to 9.1% (red line).
The Labor Force Participation Rate declined to 63.9% in July (blue line). This is the percentage of the working age population in the labor force. This is a new cycle low - and the lowest participation rate since the early '80s.
The Employment-Population ratio declined to 58.1% in July (black line). This is also at a new cycle low and the lowest since the early '80s.
Percent Job Losses During Recessions
This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.
In the previous post, the graph showed the job losses aligned at the start of the employment recession.
In terms of lost payroll jobs, the 2007 recession was by far the worst since WWII.
Part Time for Economic Reasons
From the BLS report:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged in July at 8.4 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.The number of workers only able to find part time jobs (or have had their hours cut for economic reasons) decreased to 8.396 million in July from 8.552 million in June.
These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 16.1% in July from 16.2% in June.
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 6.185 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 6.3 million in June. This is very high, and long term unemployment is one of the defining features of this employment recession.
• Earlier Employment post: July Employment Report: 117,000 Jobs, 9.1% Unemployment Rate