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The BLS Jobs Report Covering July 2013: Slow Build But In Poor Quality Jobs

The short version:
In July, unemployment fell to 7.4%. This was because the labor force seasonally adjusted (trendline) was largely unchanged and so most of the 227,000 increase in employment came from net hiring among the unemployed and not those entering the labor force. Employment remains 2 million below the last peak in January 2008.

Unadjusted actual, full time employment rose by 288,000 and part time employment fell by 17,000. The trendline showed the opposite of this: a 92,000 increase in full time and a 172,000 increase in part time workers. The trendline is the future maybe. The actual unadjusted numbers are where we live month to month. There is no evidence for a bump in part time work due to the Obamacare corporate mandate. Besides, this mandate has been put on hold for a year.

My various real measures for unemployment (~12%) and disemployment (~17%), that is un- and under employment have been gradually improving, but 2013 is shaping up as not quite as good as 2012. Employment growth this year could be at or a few hundred thousand below what is needed to keep up with population growth, unless there is a larger than usual spurt at the end of the year.

In the business survey, jobs increased by 162,000 seasonally adjusted. This was not quite as good as the previous two months. Additionally, the previous two months were revised down 26,000.

Unadjusted, the survey picked up this month a lot of the loss of government jobs (1.219 million) due to the end of the school year. These were mostly at the local government level. Still the overall number of jobs declined by only 113,000.

Unadjusted, construction added 62,000 jobs. Manufacturing was static. Healthcare was unusually static too. Overall, the crapification of American jobs continued with increases in retail and hospitalitiy and leisure.

Both earnings and hours (only given in seasonally adjusted terms) fell in July. These losses were broadly based. Year over year average weekly earnings for the bottom 80% increased by 1.6% or at or below inflation. Year over year, the top 20%'s average weekly earnings increased by about 3.1% beating inflation.

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Household/Employment Survey

Potential Labor Force
In July, the potential labor force as defined by the Civilian Non-Institutional Population over 16 (NIP) increased 204,000 from 245.552 million to 245.756 million. Multiplying this by the seasonally adjusted employment ratio for July (58.7%) gives a rough estimate of the number of jobs needed to keep up with population growth: .587(204,000) = 120,000.

Labor Force
Seasonally adjusted (trend line), the labor force decreased 37,000 from 155.835 million to 155.798 million.

Unadjusted (actual), the labor force grew 107,000 from 157.089 million to 157.196 million.

As I pointed out last month, adjusted the summer peak for the labor force occurs in June while the unadjusted or actual labor force peaks in July not just for the summer but for the year. The labor force increased, unadjusted, 2.350 million in May and June. This is due to the end of the school year and good weather. The July increase is quite small by comparison but this is usual and we might best view June-July as a plateau.

Participation Rate
The labor force participation rate is the ratio of the current labor force to the potential labor force. Once again, it reflects the changes we just saw in the labor force. Seasonally adjusted (trendline), it decreased one-tenth of a percent to 63.4% while unadjusted (actual) it was unchanged at 64.0%.

Employment
Seasonally adjusted, employment rose 227,000 from 144.058 million to144.285 million.

Unadjusted (actual), employment grew 272,000 from 144.841 million to 145.113 million.

These kinds of increases are not unusual for June-July.

Employment-Population Ratio
Seasonally adjusted, the employment population ratio was unchanged at 58.7%. Unadjusted, it was unchanged at 59.0%.

These rates are maginally better than last year, but remain significantly below pre-recession levels.

Unemployment
Seasonally adjusted (trendline), the unemployed decreased 263,000 to 11.514 million.

Unadjusted (actual) unemployment decreased 165,000 to 12.083 million. This is somewhat better than the last few years where June-July unemployment is unchanged or increases.

Unemployment rate
Seasonally adjusted (trendline), the official unemployment rate dropped two-tenths of a percent to 7.4%.

Unadjusted, the unemployment rate declined one-tenth percent to 7.7%.

Analysis
The labor force changed little in July. So increases in unemployment were mirrored by declines in unemployment, resulting in the fall we see in the unemployment rate. The participation rate held steady but should fall next month due to the beginning of the school year and changes in seasonal jobs.

Seasonally adjusted (trendline) employment remains 2.093 million below the January 2008 peak, which was itself a product of seven years of unremarkable to bad employment growth during the Bush Administration.
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Full Time vs Part Time Employment
Seasonally adjusted (trendline), full time employment (35 or more hours/week) was little changed increasing by 92,000 to 116.090 million and part time employment (1 to 34 hours/week) rose 174,000 to 28.233 million.

Unadjusted (actual), full time employment increased 288,000 to 117.688 million and part time employment was essentially unchanged, declining 17,000 to 27.425 million

Involuntary vs. Voluntary Part Time Employment
Seasonally adjusted (trendline), involuntary part time workers (those who would work full time if they could) was largely unchanged, increasing 19,000 to 8.245 million.

Unadjusted (actual), this group fell 116,000 to 8.324 million. This is almost identical to the 8.316 million in this group in July 2012.

Seasonally adjusted (trendline), voluntary part timers increased 84,000 to 19.128 million. Unadjusted (actual), they dropped 427,000 to 17.503 million. This drop is expected, and this group should rebound in September with the return of children to school.

Analysis
So far there is no indication in the Household survey that employers are converting their employees to part time status or that they are hiring more part timers in general in response to Obamacare. Of course, Obama recently gave corporations and extra year to come into compliance so it is always possible that these conversions may simply be delayed and we will see them next year.

Also I will just note again that the BLS' definition of "voluntary" part time workers is controversial since it includes those who can only work part time due to child care responsibilities or who are taking care of a relative as well as retirees drawing Social Security who may need extra income to make ends meet but who are restricted by limits imposed on them by Social Security on how much they can earn.
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The U-6
The BLS' broader measure of un- and under employment, the U-6, dropped, seasonally adjusted (trendline) 0.3% to 14.0%. Unadjusted, it also dropped 0.3% to 14.3%.

Seasonally adjusted, the U-6 is composed of 11.514 million unemployed, 8.245 million involuntary part time workers, and 2.414 million of the marginally attached (those who have no job but looked for work in the last year but not the last month; a decrease of 168,000), or 22.173 million total, a decrease of 412,000 from last month.

[Standard note]
The BLS has a restrictive, though internationally recognized, definition of unemployment, that is without a job but have looked for one in the last 4 weeks. The marginally attached are not counted as part of the labor force and their use in the U-6 is an indication that this is what the BLS considers its functional undercount to be.

The BLS also has a more extended category: Not in Labor Force, Want a Job Now (seasonally unadjusted). In July, this fell 290,000 to 6.832 million. I would note that the BLS has had nearly the same drop June-July involving nearly the same numbers for the last 3 years.

This category clearly does not usually reflect well actual movements in the economy. So I have developed a simple alternative to it. I calculate the size of where the labor force should be by multiplying the potential labor force of the NIP by a participation rate characteristic of a solid economic expansion (67%, the Clinton boom was at or above this level for nearly 40 months). The difference between this and the current labor force measures the size of the real BLS undercount, those who do not have jobs but would work if jobs were available to them. This then allows me to recalculate where real unemployment is and where real un- and under employment (disemployment) is.

.67(245.756 million) = 164.657 million (where the labor force should be)
Trend Undercount:
164.657 million — 155.798 million = 8.859 million, an increase of 174,000 from June
Current Undercount:
164.657 million — 157.196 million = 7.461 million, an increase of 30,000
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Real Trend Unemployment (that is seasonally adjusted) :
11.514 million (U-3 unemployment) + 8.859 million (undercount) = 20.373 million, down 89,000
20.373 million / 164.657 million = 12.4%, unchanged from last month

Real Unemployment Now (i.e. seasonally unadjusted) :
12.083 million (U-3 unemployment) + 7.461 million (undercount) = 19.544 million, down 135,000
19.544 million / 164.657 million = 11.9%, down0.1%
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Real Trend Disemployment:
Real Trend Unemployment + involuntary part time workers seasonally adjusted = 20.373 million + 8.245 million = 28.618 million, down 70,000
28.618 million / 164.657 million = 17.4%, unchanged from last month

Real Disemployment Now:
Real Unemployment Now + involuntary part time workers seasonally unadjusted = 19.544 million + 8.324 million = 27.868 million, down 251,000
27.868 million / 164.657 million = 16.9%, down 0.2%

Analysis
Real trend numbers were little changed in July. Real current numbers showed improvement. The real numbers remain significantly higher than the official figures, but are gradually improving. I am not sure, however, how much longer this will continue. Year over year employment growth in 2013 looks to be falling behind the increase in employment needed to keep up with population growth.

Other
The number of long term unemployed (6 months or more) dropped 82,000 to 4.246 million. The long term unemployed account for 37% (unchanged from May-June) of the U-3 unemployed. Year over year, the long term unemployed have fallen by 921,000. It is not clear how many found employment and how many simply stopped looking for work.

White unemployment improved was unchanged at 6.6%. White teen unemployment dropped 0.1% to 20.3%. African American unemployment decreased 1.1% to 12.6%. African American teen unemployment decreased 2.0% to 41.6%.

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Establishment/Business/Jobs Survey

Jobs
Seasonally adjusted (trendline), jobs increased 162,000 in July to 136.038 million. This represented an increase of 161,000 jobs in the private sector to 114.186 million, and a gain of 1,000 in government to 21.852 million. After being revised up 20,000 last month, the May jobs number was revised down 19,000 this month to 176,000. The June number was also revised down 7,000 to 188,000.

Unadjusted (actual) jobs, having hit their summer peak in June, decreased 113,000 in July to 135.664 million.

Unadjusted, manfacturing lost 5,000 jobs to 12.045 million; and construction added 62,000 to 6.054 million.

Unadjusted, retail trade added 47,900 jobs; financial activities, 30,000; professional and technical services 33,700. Temp jobs fell 24,900. Healthcare was unusually static, losing 1,500 jobs. Leisure and hospitality added 82,000 jobs, of which amusements, gambling, and recreation gained 43,100 while food services and drinking places lost 6,700 jobs.

Unadjusted, government lost 1.219 million jobs in July. Almost all of these were at the local level in education due to the end of the school year.

Hours and Earnings
Average weekly hours for all employees (Note: hours and earnings are only given seasonally adjusted) fell one-tenth hour to 34.4 hours after being unchanged for three months in a row. Average hourly earnings decreased two cents to $23.98. Consequently, weekly earnings decreased $3.09 cents to $824.91. Year over year, average weekly earnings have increased 1.9%.

Average weekly hours for production and nonsupervisory employees (blue collar and clerical workers, seasonally adjusted) also fell one-tenth of an hour to 33.6 hours. Average hourly earnings were unchanged at $20.14, and average weekly earnings fell $2.02 to $676.70 (or what they were in May). Year over year, average weekly earnings have increased 1.6%

Because production and nonsupervisory employees comprise about four-fifths of the labor force, the greater year over year rise in average weekly earnings among all employees indicates that earnings in the top 20% must have increased by about 3.1% or twice the rate of the lower 80%. This means that while most workers' earnings are losing ground to or just keeping up with inflation, the top quintile remains ahead of it.

Household data (Employment/unemployment)
Statistical significance: +/ - 400,000
The A tables: http://www.bls.gov/cps/cpsatabs.htm
A 1 for most information and categories
A 2 Unemployment by race
A 8 Part time workers
A 9 Full time workers
A 12 Duration of unemployment
A 15 U 6 un- and under employment
A 16 Persons not in labor force

Establishment date (jobs)
Statistical significance: +/ - 100,000
The B tables: http://www.bls.gov/ces/cesbtabs.htm
B 1 Total jobs and jobs by industry/type
B 2 Weekly hours, all employees
B 3 Hourly and weekly earnings, all employees
B 6 Weekly hours, blue collar
B 7 Hourly and weekly earnings, blue collar

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jo6pac's picture
Submitted by jo6pac on

be right just the other day 0 was at an amazon warehouse and everything is good. In my little party of Calli amazon is hiring 1600 for their million sq. warehouse. Oh sure 1/2 the jobs will be part-time on call and the other 1/2 full time no bennies, $10.00hr so you might be able to pay rent after the fuel bill and who needs food. This recovery from hell and it's going according to the plan of the elite as they finish killing Main Street.

Thanks for the update and straight talk.

Submitted by jawbone on

NPR did a little analysis of the numbers, focusing on who makes up those "out of the labor market": Retirees with actual livable means living the good life, retirees aged out of the labor market while staying long term unemployed, parents who "choose" (meaning it's the only logical financial decision; a stay-at-home father, forced out of his factory work, caring for his daughter while his doctor wife was the breadwinner was featured), students who can't find work and take some summer courses, and those who have been actively seeking work but after months, even years, of no success and took 4 weeks or more off from searching.

(I should check my memory, but I am beat, going to bed. Had a terrible sinus headache since wee hours of the morning, the kind that makes me nauseous. Finally got rid of the nausea about 5:30 PM; still have general sinus headache pain. Ack.)

Scary that wages have gone down, but it fits with the corporatist objective: cheap, cheap labor with lots of unemployed desperate to work at any lousy job.

Barbara Garson wrote about how since 1978 average worker effective buying power had increased a whole $4.00 until about 2008. And that was, iirc, wiped out during the Big $hit Meltdown, aka financial crisis. So, now it's going down yet more?

Damn.

Sounds the right time for Obama to push his freakin' Medicare/SocSec cuts again, right?

I'd love to see him Grand Impeached over his damn machinations to bring about his Grand Bargain.

Submitted by lambert on

A lot of reasons to hate it, but (not surprisingly) the standard Republican talking point isn't one of them.

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi