9 things to know about Friday's jobs report
Yes, it's dismal. People are fleeing the job market. Services employment is dropping, but manufacturing shows some strength. If you really want a job, get into energy or mining.
Yes, it was a miserable jobs report that the Labor Department delivered today. Capital Economics, a British consulting firm that studies the U.S. economy closely, said the report "doesn't have a single redeeming feature."
The national unemployment rate moved up to 9.2% in June. Nonfarm payrolls grew by only 18,000; private payrolls grew by 57,000, the Labor Department said. Government payrolls fell by 39,000, and there's no chance that the situation will change anytime soon. Some 272,000 people dropped out of the work force. Temporary jobs fell by 12,000.
The economy appears to have "hit a brick wall in May," wrote economist Nigel Gault of IHS Global Insight. In February, March and April, the economy added about 215,000 jobs a month. That rate collapsed to only 22,000 a month in May and June.
No wonder, then, that stocks tumbled after a big rally emerged starting on June 27.
Article continues below.The report was at odds with a Thursday report from payroll processor ADP that suggested private payrolls had expanded by 157,000 jobs. The report had set off a rally in the stock market and caused many economists to boost their forecasts for today's 's jobs report.
Here's what else you need to know.
The unemployment picture is worse than the headline 9.2% unemployment rate. The Labor Department looks at "alternative measures of labor underutilization." A measure in this group is what some analysts call the real unemployment rate. This includes total unemployed, plus people who are marginally attached to the work force and working part time because they can't find full-time work. The rate was 16.2% in June -- up from 15.8% in May but down from 16.5% in June 2010.
The workweek isn't growing. The total private workweek was 34.3 hours in June, down from 34.4 hours in April and May. The implication is clear: Consumer budgets will continue to be stressed. If you wanted more hours, the place to be was working in mining, which includes the oil and gas industry. The workweek in that sector was 44.1 hours.
Hourly earnings aren't growing either. Friday's report shows that average hourly wages for all workers on private payrolls grew a whopping penny in June, to $22.99. Over the past 12 months, wages have risen 1.9%. Between May 2010 and May 2011, the Consumer Price Index rose 3.6%.
Manufacturing grew, including automobile manufacturing. This suggested to many analysts that the supply problems created by the Japanese earthquake are easing. Automotive manufacturing jobs were up by about 1,000. Fabricated metals jobs grew by 7,800.
Service employment grew -- but by just 53,000. Growth was strongest in trade, transportation and utilities but not in airlines. The financial services industry lost 15,000 jobs.
Government employment fell by 39,000. That included 14,000 at the Federal level and 12,000 in local education. Some 354,000 federal jobs were lost in the past year; many of those were people who worked on the 2010 census.
Mining is hot. Oil and gas employment is up 14,100 in the past year. Minerals mining jobs are growing. Even coal mining employment is up more than 6,000.
Construction didn't grow. No surprise there. Overall construction employment fell by 9,000, with pullbacks in residential construction, nonresidential construction and heavy construction projects. The construction industry lost 2.2 million jobs between its peak in April 2006 and its bottom in June 2010. Construction employment has hovered around 5.5 million ever since. Residential construction employment is down 45% since its April 2006 peak and hasn't budged off 560,000 since then. Here's a question: How many of those jobs are full time?
The labor participation rate is at a 27-year low. This measures the civilian labor force against the civilian noninstitutional population. The rate was 64.1% in June.
What's the prognosis? Here's where Washington comes in. The debt-reduction talks are likely to accelerate federal and state job cuts in the next few years. It may get worse than that in the short term if the administration is forced to shut down much of its operations in August.
The Republicans hope that cutting federal spending will goose up the private sector. The big question is whether the private sector can sop up those workers cut loose.
Not to worry, Mr. Obama is give JOBS his full and undivided attention... Mr. Obama, do the country a favor, and practice your golf swing. The country cannot afford any more of your work results...
November 2012 cannot get here soon enough... Enjoy your 2nd Annual "Recovery Summer"...
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