Employment Report: Yawn


By Karl Denninger

The “Big Report” is out…

Total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 percent, the U.S. Bureau of Labor Statistics reported today. The decline in payroll employment reflected a decrease (-225,000) in the number of temporary employees working on Census 2010. Private-sector payroll employment edged up by 83,000.

That was “better than expectations”?  Yawn.

More important was the decrease in average hourly earnings and the workweek decrease.  Both are pointing to a continuation of deflationary pressures.  It’s not serious – yet – but this isn’t what you want to see if the employment situation is supposed to be improving and the economy is supposed to be recovering.

Indeed, what this looks like from here is a rather serious softening in the employment market.

U-6 stands at 16.5%, which is down marginally (0.1%) from last month, while U-3 (the common “unemployment rate”) came in at 9.5%.

The best way to represent this is in my monthly tracking charts, which I’ve updated for you here.  First, the Employment Trends chart:

Meh.  That’s not improvement, it’s flat.  The rebound appears to be over, and it’s also an illusion, as this graph disregards the entrance into the labor market of new workers (about 150,000 a month.)  That’s reflected here:

Yeah.  We’ve managed a whole one percent improvement off the bottom: we were running around 63-64% from 2000 onward until 2007, we dove to 58%, and now have “recovered” to 59%.  The so-called “improvement” in private hiring the last few months haven’t moved the needle materially at all – indeed, the “real” improvement came from the first of the year until March. 

Since then? 


If this is all we’ve got then the so-called “double dip” is assured.  In point of fact, however, there was no material recovery from an employment perspective at all.

The so-called “Great Recession” (which will eventually be recognized as the Depression it is) continues.

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