The Bureau of Labor Statistics
reported Friday that the U.S. economy created 198,000 seasonally adjusted new private non-farm jobs in July and 11,000 public-sector jobs for a total of 209,000. Officially, the unemployment rate rose to 6.2 percent. The consensus of analysts surveyed by Bloomberg in advance of the announcement was for 233,000 new jobs. This is the sixth month in a row that the BLS has reported more than 200,000 new jobs have been created. The last time there was a six-month run that high was in 1997.
The BLS calls the official unemployment rate U3. But the bureau also produces alternative measures, one of which is U6. This includes Americans with no job, those working part time who want full-time positions and workers who have looked for jobs in the past 12 months but not in the past four weeks. In other words, it covers the unemployed and underemployed, but does not cover those who have left the labor force whatever their reasons for doing so. U6 rose from 12.1 percent in June to 12.2 percent in July.
The bureau revised the number of jobs originally reported in June from 288,000 to 298,000, and in May from 224,000 to 229,000.
“You now have six straight months of greater-than-200,000 job gains,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, whose 210,000 estimate was among the closest in the Bloomberg payrolls survey. “The labor force rose, and the labor force rises typically when people are feeling better about the backdrop.”
By the bureau's count, there are now 638,000 more jobs than at the pre-recession peak.
It's always good to remember that the BLS itself notes, with a 90 percent confidence level, that "the monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 90,000." In other words, the bureau's statisticians are 90 percent confident that real number of new jobs created in July wasn't necessarily 209,000, but somewhere in a band between 119,000 and 299,000.
Both full-time and part-time jobs are included in the bureau's total. Someone who reports s/he was hired to work 10 hours a week in July is counted in the total the same as someone hired to work 40 hours a week.
Although hourly wages edged upward again, workers are barely keeping up with inflation, now running at about 2 percent a year.
The bureau counted the unemployed in July at 9.7 million people, up from 9.5 million in June. This number does not include people who have retired, gone back to school, or given up a job to take care of young, old or disabled family members. It also doesn't include the millions of workers who have left the workforce out of despair they will find a job.
The employment-population ratio remained steady at 59 percent. The labor force participation rate rose slightly to 62.9 percent, still a 36-year low. The civilian labor force rose 329,000.
Americans in the category of the long-term unemployed—jobless for 27 weeks or more—rose to 3.2 million, 32.9 percent of the total unemployed.
For more details about today's jobs report, please continue reading below the fold.
The payroll services company Automatic Data Processing reported on Wednesday that the economy gained a seasonally adjusted 218,000 private-sector jobs for July. ADP does not report on public-sector jobs, and its calculation for the private-sector only occasionally matches those of the BLS.
Among other news in the July job report:
Demographic breakdown of official (U3) seasonally adjusted jobless rate:
• African American: 11.4 percent
• Latino: 7.8 percent
• Asian (not seasonally adjusted): 4.5 percent
• American Indian (data not collected on monthly basis)
• White: 5.3 percent
• Adult women (20 and older): 5.7 percent
• Adult Men (20 and older): 5.7 percent
• Teenagers (16-19): 20.2 percent
Duration of unemployment:
• Less than five weeks: 2.6 million
• 5 to 14 weeks: 2.4 million
• 15 to 26 weeks: 1.41 million
• 27 weeks and more: 3.15 million
Job gains and losses in selected categories:
• Professional services: + 47,000
• Transportation and warehousing : + 7,900
• Leisure & hospitality: + 21,000
• Information: + 2,000
• Health care: + 25,400
• Retail trade: + 26,700
• Construction: + 22,000
• Manufacturing: + 28,000
• Average weekly manufacturing hours fell 0.2 hours to 40.9 hours.
• Average work week for all employees on non-farm payrolls remained at 34.5 hours for the fifth month in a row.
• Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $20.61.
• Average hourly earnings for all employees on private non-farm payrolls rose 1 cent to $24.45.
Here's what the seasonally adjusted job growth numbers have looked like in July for the previous 10 years.
July 2004: + 32,000
July 2005: + 373,000
July 2006: + 207,000
July 2007: - 33,000
July 2008: - 210,000
July 2009: - 327,000
July 2010: - 61,000
July 2011: + 106,000
July 2012: + 160,000
July 2013: + 149,000
July 2014: + 209,000
••• •••
The BLS jobs report is the product of a pair of surveys, one of more than 410,000 business establishments called Current Employment Statistics, and one called the Current Population Survey, which questions 60,000 householders each month. Here is the BLS's explanation of its methodology. The establishment survey determines how many new jobs were added. It is always calculated on a seasonally adjusted basis determined by a frequently tweaked formula. The BLS report only provides a snapshot of what's happening at a single point in time.
It's important to understand that the jobs-created-last-month-numbers that it reports are not "real." Not because of a conspiracy, but because statisticians apply formulas to the raw data, estimate the number of jobs created by the "birth" and "death" of businesses, and use other filters to fine-tune the numbers. And, always good to remember, in the fine print, they tell us, with a 90 percent confidence level, that the actual number of newly created jobs reported each falls within a plus or minus 90,000 range.