Modest Job Creation Employment Situation Bottom Line: While July's jobs gains were less than expected, the overall report showed continued moderate improvement in labor markets. The tally of teacher jobs, always volatile this time of year, fell, contributing to losses in both the private and public sectors that are likely temporary. Additionally, there were losses in the hobby and toy segment of retail that were likely one time and related to a major bankruptcy. The household employment survey grew sharply, pushing the unemployment rate back down below %. Hourly earnings were a touch lower than expected and saw negative revisions however, on a trend basis there has been a slight acceleration in average hourly earnings with the last months running at a faster pace of gains than the last and months. Overall, despite reports of labor shortages, job growth is accelerating modestly with wage gains that are still below cycle highs but accelerating slightly. Nonfarm Payrolls MoM Change NFP Month Average Payroll Employment rose by 7k in July, compared with market expectations for an increase of 9k. The prior months were revised, higher in June by k and higher in May by k. Government jobs FELL by k. Consequently, private sector jobs ROSE by 7k. Private education jobs fell by k. State and Local education jobs fell by -k. Overall employment is now.% ABOVE its year ago level, Over the past months,,k jobs have been created. - 7 8 8 8 78 7 7 7 US Employment/Population Ratio & Total US Employment as % of Population (sa) 7 8 9 7 The FELL by. percentage points in July to.9%, compared with market expectations for a small decline to.9%. Household employment rose by 89k while the labor force increased by k, resulting in a decrease in the number of unemployed of 8k. The Labor Force Participation Rate was UNCHANGED by. percentage points to.9%. The Employment-Population Ratio ROSE by. percentage points to.%..8.... Average Weekly Hours Hourly Earnings ROSE by.% in July, below market expectations of.%. Hourly earnings are now.7% ABOVE their year ago level. Weekly Earnings FELL by.%, the result of the change in hourly earnings and a shorter workweek. Weekly earnings are now.% ABOVE their year ago level. The Average Workweek FELL by. to. hours, in line the market consensus at. hours..8. 7 7 8 9 7 7 Copyright Contingent Macro Advisors, LLC. All rights reserved. Reproduction and/or redistribution are expressly prohibited. "Economic Advisory Service" is a registered trademark of Contingent T.J. Connelly, Head of Research August, 8 Steven A. Wood, Senior Economic Adviser
Modest Job Creation Payroll Employment Monthly Change - Monthly Change (left) (right) Payroll Employment Consensus *: +9 k Actual: +7 k * from Bloomberg. - Jul- Oct- Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Apr-8 Jul-8 - In July, the job gains were in Trade, Transportation & Utilities (+8k with 7k of those in Retail Trade), Professional & Business Services (+k with the addition of 7.9k in Temp Help Services), Leisure & Hospitality (+k), Manufacturing (+7k), Education & Health Services (+k), Construction (+9k), Information (-k), and Financial Activities (-k). Jobs were shed in Financial Activities (-k), and Government (-k). Three Six Twelve Five Ten Jul-8 Jun-8 May-8 Apr-8 Month Month Month 7 Year Year Thousands Monthly Change Average Monthly Change Nonfarm Payroll Employment 7 8 8 7 8 9 9 77 Previous Report 7 Goods Producing Industries 8 7 7 - Construction 9 - Manufacturing 7 8 9 7 7 - - Private Service Producing 8 8 8 8 7 7 9 Retail Trade 7-9 - 8-8 W'Sale, Trans. & Utilities 8 7-7 9 7 7 7 Information - - - Financial Activities - 9 9 Professional & Bus. Services 9 9 8 8 7 Health Services 7 Education - 9 9 Leisure & Hospitality 7 7 Other Services - 8 8 8 7 9 Government - 8 7 7 Public Education - 7 Addendum: Help-Supply Services 8-8 - 8 7 9 8 8-8 August, 8
Modest Job Creation Payroll Employment - - - - - 8 8 Manufacturing Employment - - - -8 - - - 8 8 Government Employment - - 8 8 August, 8
7 Unemployment Declines Percent Consensus *:.9% Actual:.9% * from Bloomberg. Jul- Oct- Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Apr-8 Jul-8 The number of people Working Part-Time for Economic Reasons FELL by 8k to,8k. while Long-Term Unemployment FELL by k to,k (accounting for.9% of the unemployed), while the Mean Duration of Unemployment ROSE by. weeks to. weeks. There are now. million people officially unemployed. In addition, there are another,k people who say they want a job but are not currently looking for one. Finally, another,8k people are working part-time because of slack economic conditions. Average for Three Six Twelve Five Ten Jul-8 Jun-8 May-8 Apr-8 Months Months Months 7 Years Years.9%.%.8%.9%.9%.%.%.%.9%.% 7.% Civilian Labor Force (mln.)......9.. 9.7 Change (thousands) - 9 88 8 7 8 Household Employment (mln.).....7..7.. Change (thousands) 89 9 9 7 78 Unemployed (mln.)....... 7. 7.8 8.8.8 Change (thousands) -8 99-8 -9 - -7 - -77 - -9-9 Not in the Labor Force (mln.) 9. 9. 9.9 9.7 9.7 9. 9. 9.8 9. 9. 88. Currently wants a job (mln.).........9.. Adjusted.8% 7.%.7%.9%.9%.9% 7.% 7.% 8.% 9.%.% Not at work due to weather ('. 9.... 99.. 9....9 Mean Duration (in weeks).....9..8. 7... Long-Term Unemployed ('s),,78,89,9,7,,8,87,,79,79 Part-Time for Economic Reasons,8,,87,898,7,8,87,8,8,7 7,98 ('s) August, 8
Unemployment Declines 9 8 Percent 7 999 7 9 7 Mean Duration of Unemployment Weeks 999 7 9 7 Working Part-Time for Economic Reasons 9 8 Millions 7 999 7 9 7 August, 8
Earnings Climb, Hours Decline Hourly Earnings. Hourly Earnings Monthly Percent Change... -. Consensus *:.% Actual:.% * from Bloomberg. -. Monthly % Change (left) Year-on-Year % Change (right) Jul- Oct- Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Apr-8 Jul-8 - The Index of Aggregate Hours FELL by.%, combining the moderate gain in private payroll employment and the shorter workweek. Annualized Averages for Three Six Twelve Five Ten Jul-8 Jun-8 May-8 Apr-8 Months Months Months 7 Years Years Average Hourly Earnings.%.%.%.%.9%.%.7%.%.%.%.% Prior Estimate.%.%.% Average Weekly Earnings.%.%.%.%.9%.%.%.%.9%.%.% Average Weekly Hours Total Private........7..7. Prior Estimate... Goods Producing....7...... 9.9 Manufacturing.9.9.9..9.9.9.8.7.8. Overtime........... Service Producing........... Index of Aggregate Weekly Hours Total Private -.%.%.%.%.%.8%.%.%.%.%.8% Prior Estimate.%.%.% Goods Producing.%.%.%.7%.%.%.7%.%.9%.8% -.% Manufacturing.%.% -.%.%.7%.7%.% -.%.%.9% -.% Service Producing -.%.%.% -.%.8%.%.%.%.9%.%.% August, 8
Earnings Climb, Hours Decline Hourly Earnings All Employees Production and Nonsupervisory Employees 99 997 999 7 9 7 Hours.8.....8.....8 All Employees Production and Nonsupervisory Employees Average Weekly Hours ( Month Average) 99 997 999 7 9 7 Index of Aggregate Hours - - - All Employees Production and Nonsupervisory Employees -8 99 997 999 7 9 7 August, 8