After a couple of months of halfway-decent employment reports, the one released this morning by the Bureau of Labor Statistics was a disappointment, and the details are even more disappointing than the headline numbers.
According to the “establishment survey” portion of the report (which yields the headline number), the economy added 142,000 jobs – far fewer than the 200,000-plus jobs that analysts expected. What’s worse is that, according to the household survey, the employment level (analagous to the establishment survey) rose by only 16,000. Also, the June and July data from the establishment survey were revised downward by 28,000 jobs.
Despite the tiny gain in employment level, the “unemployment rate” declined again to 6.1%, thanks to the same old trick of claiming that the size of the labor force declined again by another 64,000, even though the population grew in August by 220,000. As a result, the unemployment rate “detachment from reality index” (the difference between the official U3 unemployment rate and a more realistic figure that grows the labor force in proportion to population growth) rose again and remains at a near-record level. Here’s the chart: Detachment from Reality Index.
Because of the near-flat employment level while the population grew, the number of unemployed Americans rose by 96,000 in August: Unemployed Americans.
And per capita employment fell for the first time in four months: Per Capita Employment.
Both the number of unemployed Americans and per capita employment are at the same level as in June, 2009, a year-and-a-half into the “Great Recession.”
Manufacturing employment actually lost 1,000 jobs in August.
The average workweek was unchanged for the sixth consecutive month. (Not a sign of improving labor demand.)
It’s beginning to look like the previous couple of months were a “flash-in-the-pan” catch-up period following the dismal, weather-impacted first quarter. The economy is settling back into a low-to-no-growth mode that has characterized most of the “recovery.” As I claimed would happen in my previous post, could this be the beginning of a slow slide back into recession?