Courtesy of Mish.
Initial Reaction
The payroll survey shows a net gain of 162,000 jobs vs. an expectation of 230,000 jobs. This broke a six-month string of +200,000 jobs.
Digging into the details, things look far worse.
The household survey shows a gain in employment of only 16,000. This is the fourth month in the last five that the household survey was substantially weaker than the headline number.
The average employment gain in the past five months is 125,200 vs. an average gain in jobs over the same period of 230,800 per month.
Is a trend forming? If so, it doesn’t bode well. That said, the household survey is volatile and over time the data series merge. The question now is which one is right? At turns, the household survey tends to lead.
The labor force fell by 64,000. Those not in the labor force increased by 268,000. The unemployment rate fell by 0.1% thanks to a decline in the labor force greater than the rise in employment.
BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +142,000 – Establishment Survey
- Employment: +16,000 – Household Survey
- Unemployment: -80,000 – Household Survey
- Involuntary Part-Time Work: -234,000 – Household Survey
- Voluntary Part-Time Work: -136,000 – Household Survey
- Baseline Unemployment Rate: -0.1 at 6.1% – Household Survey
- U-6 unemployment: -0.2 to 12.0% – Household Survey
- Civilian Non-institutional Population: +206,000
- Civilian Labor Force: -64,000 – Household Survey
- Not in Labor Force: -268,000 – Household Survey
- Participation Rate: -0.1 at 62.8 – Household Survey
Additional Notes About the Unemployment Rate
- The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
- In the past year the working-age population rose by 2,270,000.
- In the last year the labor force rose by 524,000.
- In the last year, those “not” in the labor force rose by 1,745,000
- In the past year, the number of people employed rose by 2,189,000 (an average of 182,417 a month)
Please note that over the course of the last year, the working-age population rose by more than the number of people employed. In normal times, the unemployment rate would have gone up slightly. Instead, the unemployment rate fell from 7.2% to 6.1%.
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