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Economy in Brief

U.S. Nonfarm Payrolls Are Depressed & Weak
by Tom Moeller  September 2, 2011

The job market showed no glimmer of improvement last month, held back by a strike, lower factory sector employment and lower earnings. An unchanged reading for nonfarm payrolls followed downward revisions to earlier numbers and compared to expectations for a 93,000 rise. The unchanged unemployment rate of 9.1% was expected.

Nonfarm payrolls were unchanged last month following gains of 85,000 and 20,000 during July and June, revised from 117,000 and 46,000 respectively. The reading reflected a strike at Verizon, but weakness spread throughout the jobs categories. Factory sector payrolls fell 3,000 due to declines in motor vehicles, furniture, food & textiles. The 5,000 worker decline in construction employment left the y/y change at just 0.1%. In the service sector, the measly 20,000 worker increase reflected widespread weakness. Information businesses shed 48,000 jobs (-30% y/y) led by the strike but there were declines elsewhere. Retail trade jobs fell by 22,200 (+1.1% y/y) and amongst transportation & warehousing businesses, jobs fell slightly for the second consecutive month. In the government sector, jobs fell again led down by 20,000 fewer (-2.0% y/y) state & local gov't workers. To the upside, professional & business service employment rose a stable 28,000 (3.0% y/y) while jobs in health care & social assistance gained 35,500 (2.2% y/y). Temporary help jobs rose 4,000 (7.2% y/y) while leisure & hospitality jobs inched up just 2,000 (1.3% y/y).

Elsewhere in the establishment survey, average weekly worked slipped to 34.2, the lowest level since January. Along with the jobs weakness, this decline left the index of aggregate hours worked & payrolls down slightly from Q2 after that quarter's 0.9% rise.

Adding to the notion of a weak jobs report was a 0.1% slip in average hourly earnings. The decline was the first since December and pulled the y/y gain down to 1.8%. Earnings in the service sector fell m/m (+1.7% y/y) and factory sector earnings slipped as well (+1.8% y/y).

From the household survey, the unemployment rate held constant at 9.1%. That reflected a 331,000 increase (0.3% y/y) in employment and a 366,000 rise (-0.3% y/y) in the labor force. The overall unemployment rate, including involuntarily part-time workers as well as those marginally attached, ticked up to 16.2%. The labor force participation rate ticked up m/m but at 64.0% was near its lowest since 1984. The number of workers unemployed for 52 weeks or longer slipped m/m to 4.458M (+0.7% y/y) but remained near its high. The average duration of unemployment remained near its high at 40.3 weeks.

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.

Employment: (M/M Chg., 000s) Aug Jul Jun Y/Y 2010 2009 2008
Payroll Employment 0 85 20 1.0% -0.7% -4.4% -0.6%
    Previous -- 117 46 -- -- -- --
 Manufacturing -3 36 14 1.8 -2.7 -11.6 -3.4
 Construction -5 7 -7 0.1 -8.1 -16.0 -6.1
 Private Service Producing 20 104 59 1.6 -0.1 -3.5 -0.2
 Government -17 -71 -55 -2.0 -0.3 0.3 1.3
Average Weekly Hours 34.2 34.3 34.3 34.2
34.1 33.9 34.5
Average Hourly Earnings (%) -0.1 0.3 0.1 1.8 2.4 3.0 3.8
Unemployment Rate(%) 9.1 9.1 9.2 9.6
9.6 9.3 5.8
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