July jobs report: across the board solid

July jobs report: across the board solid

HEADLINES:

  • +209,000 jobs added
  • U3 unemployment rate down -0.1% from 4.4% to 4.3%
  • U6 underemployment rate unchanged 8.6%

Here are the headlines on wages and the chronic heightened underemployment:

Wages and participation rates

  • Not in Labor Force, but Want a Job Now: down -11,000 from 5.431 million to 5.420 million
  • Part time for economic reasons: down -44,000 from 5.326 million to 5.282 million
  • Employment/population ratio ages 25-54: rose 0.2% from 78.5% to 78.7% (a new post-recession high)
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.06 from $22.04,  to $22.10, up +2.4% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)

Holding Trump accountable on manufacturing and mining jobs
Trump specifically campaigned on bringing back manufacturing and mining jobs.  Is he keeping this promise?

  • Manufacturing jobs rose by 16,000 for an average of +5,500 vs. the last severn years of Obama’s presidency in which an average of 10,300 manufacturing jobs were added each month.
  • Coal mining jobs fell by -200 for an average of +100 vs. the last severn years of Obama’s presidency in which an average of -300 jobs were lost each month

May was revised downward by -7,000. June was revised upward by 9,000, for a net change of +2,000.

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mainly positive.

  • the average manufacturing workweek was unchanged at 40.9 hours.  This is one of the 10 components of the LEI.
  • construction jobs increased by 6,000. YoY construction jobs are up 191,000.
  • temporary jobs increased by 14,700.
  • the number of people unemployed for 5 weeks or less decreased by -172,000 from 2,305,000 to 2,133,000.  The post-recession low was set 18 months ago at 2,095,000.

Other important coincident indicators help  us paint a more complete picture of the present:

  • Overtime was unchanged at 3.3 hours.
  • Professional and business employment (generally higher- paying jobs) increased by 49,000 and is up +580,000 YoY.
  • the index of aggregate hours worked in the economy rose by  0.2 from 107.4 to 107.6
  • the index of aggregate payrolls rose  by 0.7 from 134.9 to 135.6.

Other news included:

  • the  alternate jobs number contained  in the more volatile household survey increased by   345,000   jobs.  This represents an increase of 1,967,000  jobs YoY vs. 2,159,000 in the establishment survey.
  • Government jobs rose by 4,000 .
  • the overall  employment to  population ratio for all ages 16 and up rose  0.1% from   60.1% to  60.2  m/m  and is  up +0.4%  YoY.
  • The  labor force participation  rate rose  0.1%   m/m and is up +0.-% YoY from 62.8% to 62.9%.

SUMMARY 

This was a solid report in both the headline numbers and the internals. Literally the only negative was the decline in coal mining jobs (a Trump promise that is so far going nowhere). Aside from that, the “worst” was that a few things like the unemployment rate were unchanged, and — of course — that wages are still pathetic for this stage of an expansion.

But this month we can celebrate not just a good jobs number, but also a new expansion high in participation, nearly a new low in short term unemployment, a new low in those who are not in the labor force at all but want a job now, and the involuntarily employed part-time. Just a solid report.

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