The Employment Situation Report was just released and it showed a loss of 125,000 in the Establishment Survey and a 301,000 loss in the Household Survey. The Household Survey also showed that the U-3 unemployment rate came in at 9.5% and the U-6 rate came in at 16.5%. The number of private sector jobs gained for June was 83,000 (census firing caused a large part of the headline decline to the tune of 225,000 jobs). This report also highlighted that 652,000 left the labor force, which affected the unemployment rate (ie made it smaller) as the denominator. The decline in the labor force is an ominous sign for the future. The revisions for April and May showed that they gained 23,000 and 2,000 additional jobs respectively. Overall, this report was mixed, but leaning towards bad, as to sustain a recovery we need much better numbers than what we got.
The BLS reported its monthly Employment Situation Report today and as I highlighted above, the report, while mixed, was generally a bad one for an economy that is coming out of a deep recession and supposedly in the midst of recovery. The birth/death adjustment added 147,000 jobs for June (all private sector), which is somewhat interesting given the decline in the overall Household Survey numbers that would seem to contradict this information (for the time anyways).
Both the employment-population ratio and the labor force participation rate fell for the month of June, which again appears to show a loss of confidence by job seekers (although to be fair, those numbers, plus the Household Survey job creation number were very positive in unadjusted terms for the month). One of the big problems we appear to be having with the data coming out of this recession are the enormous differences between the adjusted and unadjusted numbers on a monthly basis, as the validity of the typical seasonal adjustments comes into question during periods of recovery and decline.
For instance, the Household Survey in unadjusted terms showed a job gain of 385,000 vs an adjusted loss of 301,000, while the Establishment Survey showed an unadjusted gain of 245,000 jobs vs the reported loss of 125,000 jobs. I always stick with the adjusted data for reference points, but it is important to watch the unadjusted data during inflection points as well.
Finally, I wanted to provide a little outlook for the second half of the year. Based on recent economic reports that have not been all that rosy and coupled with the recent stock market declines, I believe it is likely that we will see some very strong stagnation in the economy in the second half (ie 1-2% GDP). At this point, I do not see a double-dip this year, although the inability to extend the unemployment insurance benefits concerns me greatly on that front.
This graph really says it all in terms of our slowdown for this recovery. Notice how the 1983 recovery (from another very deep recession) kept the GDP up much higher and was able to see continuous unemployment rate declines on the order of 3% for the first year of growth. We are at the end of our first year of growth and the rate hasn't budged.