Gee, where are all the people telling us that the economy is recovering and it will all be ok? ‘Da Bulls – where ‘ya be?
Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down.
The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.3 hours in June. The manufacturing workweek for all employees decreased by 0.3 hour to 40.3 hours over the month; factory overtime edged down by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.6 hours in June. (See tables B-2 and B-7.)
In June, average hourly earnings for all employees on private nonfarm payrolls decreased by 1 cent to $22.99. Over the past 12 months, average hourly earnings have increased by 1.9 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees declined by 1 cent to $19.41. (See tables B-3 and B-8.)
So much for the ADP. Yeah, it prodded me into raising my expectations as well. Fortunately it didn’t also prompt me to buy into the rally yesterday based on that ADP number, because this morning it’s basically all gone (as it well should be.)
What’s even worse is that both the workweek and hourly earnings decreased. That is, while prices go up on commodities, including food and energy, your earnings are going down not only in inflation-adjusted terms but also in nominal terms!
That’s just plain old-fashioned bad.
What’s worse is that the population increased by 176,000 but the household survey says that only 101,000 jobs were added. That is, 75,000 fewer people were working when one adjusts for population change.
This is what I have repeatedly pounded the table on – the employment rate is going the wrong way and there has been no improvement of materiality in it whatsoever.
The “big chart” is here:
This looks like we’re just barely positive on employment trends. But that’s misleading, and misleading the public is what the media is all about this morning, as they’re saying that we had a positive number. We most-emphatically did NOT.
A few workers re-entered the workforce. But that contributes to things going the wrong way; now you have more people competing for the available jobs.
The employment rate continues to bounce along the bottom, making no headway.
When adjusted for population change, which is the number that matters not only for private prosperity but also for government funding sustainability, we appear to have topped out and are once again rolling over.
Bluntly: This report just plain sucks and is further validation of my thesis that government deficit spending does not create lasting economic recovery – it instead creates asset bubbles and distortions.
Time to face reality folks.