The Bureau of Labor Statistics (BLS) today released the Employment Situation Report for July 2010. This report showed a loss of 131,000 in the Establishment Survey (the survey of businesses), with a gain of 12,000 ex-census. Private sector employment increased by 71,000 for the month. The Household Survey (the survey of 60,000 households) showed a loss of 159,000, which lead to an unemployment rate (U-3) of 9.5% and the more inclusive measure of unemployment (U-6) remained at 16.5%. The labor force shrank by 181,000 (not a good thing during a "recovery") and the participation rate was 64.6%. Revisions to previous months took June to (221,000) a downward revision of almost 100,000, May was virtually unchanged at a gain of 432,000. The employment-population ration was reported at 58.4, which is still at very low levels.
The jobs report can be found here.
Also, the birth/death adjustemt came in at +6,000 this month.
I would gauge the overall quality of this report at this point in a recovery as nothing less than bad. The numbers came pretty much in line with economist expectations, but the statistics themselves are not pointing to any "real recovery" on the jobs front, as even the bright spot of 71,000 private sector job gains, including 36,000 in manufacturing simply is not enough to get our economy rolling again.
Once again, the real problem we have is that an entire (and extremely large) class of former American workers appear to be completely unable to find work as illustrated by the graph below:
This shows that while short term unemployment has begun to fall sharply, the vast numbers that have been out of work 27+ weeks may very well be in industries (ie construction) that are not recovering at all, or in industries (clerical) that are simply no longer needed in our economy. Thus, we have a huge overhang of unemployed that may very well be in professions that have little hope of coming back.
Private sector employment has finally begun to recover, but it is doing so at an extremely lethargic pace as evidenced below (note: the graph is through June, I will update when available).
We appear to have put in a bottom, but the bounce looks about what you would get from a deflated ball.
Finally, I want to look at the employment-population ratio, as it is inclusive of the entire population (including the discouraged) and all jobs.
As you can see, the level here is still extremely depressed and is not recovering at any pace at all really. This leads me to believe that 1)we are likely looking at a more structural change in employment in the country, and 2) the boomer generation is definitely impacting this graph (both when it soared and now that it has fallen).
In summary, this report is very disappointing for jobs at this point in a "recovery", which is leading me to the conclusion that my initial theory of a bounce of an exaggerated bottom and then stagnation may in fact be correct. This means that while we may not have a technical "double-dip", we also are unlikely to see a real "recovery" and that recessionary conditions are likely to persist for some time, as it may be best to discount the horrible data from the collapse and instead start to look at comps more in line with "typical" recessions.
And just for extra info. The seasonal adjustment for July was right in line with normal, while birth/death was a bit ahead (July's average is negative 38,000 on the b/d).