Summary: Better than expected employment results; Economy growing slowly.
The Bureau of Labor Statistics announced the US economy created an amazing 163,000(+/- 100,000) new jobs in July 2012. The unemployment rate rose to 8.25% as job seekers returned to the market. The financial markets reacted favorably to the report as the Dow-Jones index moved to over 13,000 points. All major employment indicators were nearly the same as last month. Many of the indicators have not moved outside of a narrow range for the year. The following chart show the change in major categories for non farm payrolls:
Absent some external shock, economists see little improvement for the next year, regardless of promised action by the fed. The best hope for an improved economy is spending by the congress, consumers paying down some of the debt and improvements in the housing market.
The other interesting number in the employment report is a 23,000 worker increase in manufacturing jobs.
The black unemployment rate stayed at 14.1%. The historic average since 1972 is 12.3%. The measured black labor force dropped by about -160K of which -75K were people who lost jobs and -85K were unemployed. The black population grew by 33K, so people were basically dropping out of the labor market. As a result the “black not in the labor force” number grew by 189,000 people. The national labor force participation rate rose to 63.7%. Black labor force participation was 61.4 (67.8% for Black men, 62.0% for Black women and 29% for black teenagers) While the black national rates stayed at 14.1%, the white rate was parked at 7.4% and the Hispanic rate stayed at 10.3%. The black teenage unemployment was reported at 37%.
Both Obama or Romney campaigns held national party conventions and made statements on jobs and economics. Romney promised wide spread tax cuts to stimulate the economy. President Obama offer more targeted set of tax-cuts and infrastructure spending.
The long-term unemployed (27 weeks or more) increased to 5.2 million people which represents 41% of the unemployed. The “work part-time wants full-time” number was 8.2 million. These people are considered under employed. 2.5 million workers were marginally attached to the labor pool. They have looked for work in the last 12 months but not in the last four weeks. And there were 852K discouraged workers (part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
As we mention in the summary, non-farm payrolls add 163,000 jobs. Private sector hiring added 172,000 jobs (vs. 64,000 last month) and government employment dropped again by -9K. Job growth was concentrated in durable goods manufacturing(+24K), business services and healthcare. The losers were construction employment again down -1K and government employment which was down by -9,000 spots.
Non-farm payrolls were revised in May upward by 10,000 (from 77,000 to 87,000) and in June downward from 80,000 to 64,000 for a loss of 16,000 jobs.
The following chart show where the non farm payroll jobs were added by minor category:
Average work week was unchanged at 34.5 hours and wages added 2 cent in July.
ADP reported an increase in private payrolls of 163,000 positions for July.
US Monster Employment Index moved up to 147 in July from 153 in June. Hiring was up 2% compared to same month last year.
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