Michael Puente and Dan Hamilton
The BLS’s July Employment Situation was released today. Non-farm jobs grew by 117,000, highly focused on healthcare, (31,000), retail, (26,000), manufacturing, (24,000), and mining (9,000). Despite the increase in jobs, the measured employment level, an alternate measure of workers, decreased. That decrease was met by a larger decrease to the civilian labor force, causing the unemployment rate to fall from 9.2% to 9.1%. The unemployment rate has hovered in the 9.0 to 9.2 percent range for four months.
Government jobs continue to trend downward, (-37,000). This reflects state governments’ attempting to balance their budget and is also impacted by the partial shut-down of Minnesota’s government.
There were revisions to May and June’s non-farm jobs numbers; May’s jobs increase was revised up from +25,000 to +53,000 and June’s jobs increase was revised up from +18,000 to +46,000.
The long-term unemployment situation still has 6 million persons unemployed for 27 weeks or more, with 1 million discouraged workers, 1 million marginally employed, and 8 million persons on part-time employment due to economic reasons. This presents a clear lack of supply for jobs, a very weak job market. Many workers are choosing part time jobs rather than face unemployment. This illustrates that 10% of the civilian labor force is not the optimum or preferred employment situation.
Private non-farm job growth has been positive while public sector job losses have offset those gains for three months in a row. Companies not optimistic about a vigorous recovery have found little harm in simply waiting. State, local, and even now federal governments have all come under budget scrutiny, greatly hampering their ability to directly affect unemployment. With many of their tools and policies tied up in the banking crisis, there seem to be few initiatives on addressing the needs of the labor market.