The non-farm payroll and unemployment numbers this morning were pretty much the bad news the stock market has anticipated in its declines over the last few days.
Payrolls fell by 125,000 in June. That was the first monthly decline this year and slightly worse than the 100,000 drop expected by economists surveyed by Briefing.com
Most of the decline, as expected, came from an end to temporary jobs for 225,000 workers conducting surveys for the 2010 census. (Overall government and private sector temporary employment rose by 20,500. That’s at least moving in the right direction since temporary jobs numbers increase before companies hire workers for permanent jobs—in most recoveries.)
 Employment at private companies rose by 83,000 in June. That’s an extremely tepid increase. Revised data for May, released today, show that the economy added a net 110,000 private sector jobs that month.
 Despite the bad news on overall employment, the official unemployment rate fell to 9.5% from 9.7% in May as discouraged workers stopped looking for work and left the officially-defined workforce. The total unemployment rate, which counts discouraged workers and workers with temporary jobs but who would like permanent jobs, fell to 16.5% in June from 16.6%.
So how are we doing in creating jobs in this recovery?
At June’s rate of 83,000 net jobs added in the private sector, it would take 100 months—or 8.3 years—to recover the 8 million jobs lost by the U.S. economy during the recession that began in December 2007. (For more on our jobs crisis see my post https://jubakpicks.com/2010/06/29/weve-got-a-jobs-creation-crisis-and-so-far-the-u-s-is-ignoring-it/ )
June’s end to 225,000 temporary census jobs leaves 339,000 temporary workers still on the job collecting census data. Those jobs will be ending in the next few months—with the biggest drop likely in July. That will make the top line employment data depressing reading for a few more months no matter what the private economy is doing.
The ‘official’ unemployment figure has been calculated the same way for decades. Most people never knew that the unemployment figure was not a true reflection of total unemployment, i.e. never included those not actively seeking work or part-timers. But then, if a person is not seeking work (filling out apps) are they really part of the work force? A rhetorical question. And as far as filling out an application as an ‘exercise in futility’? Kinda like the lottery isn’t it? Not much likelihood of winning but one thing is guaranteed – you CANNOT win without an entry. :o)
I am going to get cynical and claim that people “look for job”, i.e. fill out an application, as long they get unemployment benefits. What is the point of taking the time to fill out an application if you are almost sure it is an exercise in futility?…
Christopher,
Try this link to the Bureau of Labor Statistics site.
http://www.bls.gov/cps/cps_htgm.htm
Generally, if you haven’t actively looked for a job in the last four weeks (i.e. filled out an application), you are considered a discouraged worker. This classification is not dependent upon a worker receiving unemployment compensation.
I wonder what really gets a person kicked off of the “official” number. If it is tied to unemployment given out then it might not be as much as the “discouraged worker” as the fact that the extensions on unemployment have failed to pass in for the last month, so anyone that is either just finished their 26 weeks or a “tier” in the last month would be kicked off that list. Does anyone know or have a link to how they actually figure the official number?
Thanks.
So if more and more discouraged workers stop looking for work, the official unemployment rate might drop below 9% and actually look like it’s improving …?
Maybe we ought to rework the formula we calculate the ‘official’ rate.
trader – PTY invests mainly in low-rated corporate bonds – why assume the added company-specific risk when solid A-rated corporate bond funds and low-cost ETFs (check out LQD) are available and peforming well? OTH, Pimco and Bill Gross always seem to know what they’re doing.
The U.S. faces years of high unemployment, which means pressure on the Obama administration and Congress to create jobs. Yet with deficits north of 10% of GDP, there is significant resistance to stimulus spending. More pressure on the Fed for Quantitative Easing II? Of course, this relates to the article below – lowering long-term growth prospects, and perhaps weakening the U.S. dollar, as well.
Off topic. Anyone have any thoughts on PTY? Dividend is 8.0%