Before or after you read today's jobs report, you might want to read this from Monday: Focus on monthly jobs report distracts from underlying economic problems. An excerpt: "Even though the BLS report is filled with other numbers, the two that will stick in people's minds, as always, are the ones the headline writers focus on—the amount of new jobs created and the official unemployment rate. The truth is those two numbers aren't quite real. They are a concocted brew of raw data and formulas of seasonal adjustments, estimated business creation and business collapse, as well as standardized measurements that don't provide the whole picture. Indeed, although no conspiracy is involved, taken in isolation those numbers deeply distort our true situation."•••
The Bureau of Labor Statistics reported Friday morning that, seasonally adjusted, the economy created 103,000 new private jobs in August, and shed 7,000 government jobs for a net gain of 96,000. The consensus of experts surveyed ahead of time by Bloomberg was that there would be a net gain of 125,000. The official unemployment rate fell to 8.1 percent, mostly because of a shrinking work force.
Revisions changed previously reported growth in payroll employment from 64,000 in June to 45,000 and from 163,000 in July to 141,000. With the Great Recession now officially over for 39 months, the government counts 12.5 million Americans as unemployed.
However, an alternative measure of unemployment labeled U6—which counts part-time workers who want full-time jobs and some but not all Americans who want jobs but have stopping looking for one—fell from 15.0 percent to 14.7 percent. When unemployed workers, underemployed ones and Americans who are not included in the work force but say they want a job are added together, the total unemployed and underemployed population is now 27.3 million Americans.
For the eight months just ended, the average monthly job growth has been 139,000.
The civilian labor force participation fell to 63.5 percent, the lowest level in 30 years; the employment-population ratio fell to 58.3 percent.
The BLS jobs report is the product of a pair of surveys, one of business establishments and one called the Current Population Survey, which questions 60,000 householders. The establishment survey determines how many new jobs were added, calculated on a seasonally adjusted basis. The CPS provides data that determine the official "headline" unemployment rate, also known as "U3." That's the number which is now 8.1 percent.
According to the more volatile CPS, 368,000 Americans left the civilian work force in August and 119,000 fewer were working than had been working in July. The business survey and the CPS often clash in this manner. Some analysts say that the CPS offers better hints as to the way the job situation will go in the near future, but not all agree.
Here's what the job growth numbers have looked like for August in the most recent 10 years:
August 2003: - 45,000
August 2004: +122,000
August 2005: +193,000
August 2006: +183,000
August 2007: - 18,000
August 2008: - 274,000
August 2009: - 231,000
August 2010: - 51,000 (worsened by Census layoffs)
August 2011: + 85,000
August 2012: + 96,000
Among other changes detailed in today's job report:
• Health care: +17,000
• Manufacturing: -12,000
• Professional and business services: +27,000
• Food services: +28,000
• The average workweek (for production and non-supervisory workers) remained at 34.4 hours.
• Average manufacturing hours fell to 40.5
• The average hourly earnings for all employees on private nonfarm payrolls fell one cent to $23.52. Over the past year such earnings have risen 1.7 percent, compared with an inflation rate now also running at 1.7 percent.