Saturday, July 9, 2011

June Employment: Bad Economy!

A really bad employment report - according to the BLS, the economy only gained 18,000 jobs in June and the unemployment rate ticked up to 9.2% (from 9.1%).
The government continues to be a drag - private sector payrolls increased by 57,000, but government employment shrank by 39,000.  The employment numbers are calculated from a survey of businesses; the numbers from the BLS' survey of households (from which the unemployment rate is calculated) are even worse - the number of employed persons dropped by 445,000 and labor force participation decreased to 64.1%.

On a non-seasonally adjusted basis, the unemployment rate rose from 8.7% to 9.3% because of a large increase in the labor force (1.089 million, presumably due to the end of the school year) outstripped a small increase in employment (101,000).  Non-seasonally adjusted payrolls rose by 376,000.  The comparison between seasonally-adjusted and unadjusted numbers shows that June is a month that normally sees a big increase in labor force participation and employment, and this June's increase in employment is disappointing compared to what we would expect for this part of the year (and what is needed to keep pace with changes in the labor force).

The discussion in Washington seems increasingly detached from reality...

See also: Tim Duy, Menzie Chinn, Calculated Risk, Greg Ip.

No comments: