Jobs Report: Weak Private Sector Growth, Stuck on 9.5% Unemployment
The US lost 131,000 overall jobs in July thanks to the winding down of the Census, but even the private employment numbers look anemic. Private companies hired just 71,000 new workers, not enough to change the U6 jobless rate, which stayed steady at 9.5%. 14.6 million Americans remain unemployed, and at the rate of 71,000 hires a month… well, you see how it would take a while.
The numbers get worse when you look at those marginally attached to the labor force.
About 2.6 million persons were marginally attached to the labor force in July, an increase of 340,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 1.2 million discouraged workers in July, up by 389,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
6.6 million Americans are considered among the long-term jobless.
Manufacturing and health care employment were up, but state and local government employment, even beyond the loss of Census jobs, fell almost by the same number as the increase in private employment, canceling things out. The $26.1 billion in state fiscal aid expected to pass Congress next week could help this, but only at the margins.
The revision for June took a major hit, from -125,000 to -221,000. Over 350,000 Americans have lost jobs in the last two months. While this mainly owes to the Census ups and downs, if you take out that noise in the data we’re just moving along laterally, in the 31st month since the beginning of the recession.
No wonder Christy Romer left.
UPDATE: Dean Baker:
The job loss corresponds to a decline in labor force participation. While the unemployment rate has edged down by 0.2 percentage points to 9.5 percent since May, this is attributable to people who gave up looking for work and left the labor force. The employment to population ratio fell by 0.3 percentage points to 54.4 percent, only slightly above the 54.2 percent low in December […]
There was a small uptick in average hours (all in the goods-producing sector), but this just returned hours to the May level. There is zero evidence to support the claim that firms are reluctant to hire because of uncertainty, since this would imply that they were increasing hours. Nominal wages rose at just a 1.4 percent annual rate, also not a good sign.
With the end of the inventory cycle, a huge wave of state and local cutbacks and further declines in house prices on the way, the situation looks bleak for the second half of 2010.