The July Jobs Report

The decline in payroll jobs of 247, 000 was a pleasant surprise to most observers, including me. It continues the "less bad is the new good" paradigm, but I'll take it. The negative must get smaller before it becomes positive.

More surprising to me was the decline in the unemployment rate from 9.5 percent to 9.4 percent. Since the unemployment rate-measured by the household survey-had risen only a tenth in June with a fairly large decline in payroll employment, I thought it had some catching up to do.

I was expecting about a 300,000 decline in payroll employment with unemployment rising to 9.7 percent. The decline in the unemployment rate was made possible by an even smaller decrease in employment by the household estimate than by the payroll estimate. According to the household survey, employment declined by only 155,000, compared to the 247,000 in the payroll survey. For some reason I haven't heard that lower number mentioned in financial TV.

The more favorable household number will probably be offset later since it was enabled in part by a reduction of the civilian labor force and a large increase of potential workers not in the labor force. Referring to my previous posts, too many people were probably seeking work with their caps on backwards.

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  1. John Booke says:

    There are 862,000 new Social Security retirees since January this year. Beats the old record of 568,000 for the first seven months of 2000. As you said last month, these new retirees can still be counted as unemployed in the Household survey. But don’t you think most of these retirees have just given up looking for a job? If you were 62 and out of a job, hit the limit on unemployment benefits and sitting on a decimated retirement fund wouldn’t you opt in for early Social Security retirement? If not then what would you do? How would you cope with a tough situation like that? Is our country better off with these people opting in early for Social Security benefits so that they are not competing with our younger people for scarce jobs?