Friday, September 2, 2011

USA Unemployment Rate Continues at 9.1% (Charts) *No jobs growth in August*

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Bureau of Labor Statistics: Monthly Employment Situation Summary


Official Statement by the U.S. Bureau of Labor Statistics (September 2, 2011) Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.

Unemployment Rate (Chart) Per the Household Survey Data, the unemployment rate (U-3) was unchanged at 9.1% (preliminary) in August 2011, which is 5 consecutive months at or above 9.0%. The unemployment rate had previously been at or above 9% from May 2009 through January 2011, for 21 consecutive months. The unemployment rate dropped below 9% in February and March 2011. The Great Recession peak was in October 2009 at 10.1%. The Post-Great Recession low has been March 2011, at 8.8%.


Total Unemployed (Chart) Per the Household Survey Data, the total unemployed increased to 13.97 million in August 2011. The Great Recession peak was in October 2009 at 15.63 million. The Post-Great Recession low has been March 2011, at 13.54 million.


Total Nonfarm Employment Monthly Net Change (Chart) Per the Establishment Survey Data, total nonfarm employment monthly change was flat at (preliminary) in August 2011. This is an 11-month low, the lowest since since since September 2010 (-29,000). The total  nonfarm employment job losses peaked during the Great Recession at -820,000 in January 2009. The best jobs gain subsequently has been the +458,000 in May 2010, which was mostly attributable to the hiring of census workers. Total nonfarm employment is a net number = net private sector jobs gain/loss plus or minus net government sector jobs gain/loss.


USA Net Jobs Gain (Loss) by Year (Chart) Per the Establishment Survey Data, total nonfarm employment by year illustrates the Great Recession job losses and subsequent insufficient Recovery rebound. 2007 was the last year to create jobs before the Great Recession, at +691,000 jobs gained. Great Recession job losses began in 2008 at -3,600,000. 2009 was even worse at -5,063,000. This resulted in a total of -8,663,000 jobs lost during the Great Recession in 2008 and 2009. As the Great Recession ended in 2009 and the Recovery began, the net jobs gain in 2010 was a meager +940,000. From 2008 through 2010, the net jobs losses were -7,723,000. 2011 year-to-date net jobs gain of +872,000 is now weaker than 2010 for jobs creation. Total nonfarm employment is a net number = net private sector jobs gain/loss plus or minus net government sector jobs gain/loss.



Commentary The August Unemployment Rate (U-3) of 9.1% is unchanged from July and Underemployment Rate (U-6) increased +0.1% to 16.2%, which is discouraging. In addition, the prior months of July and June jobs growth data was revised downwards (see below). The Total Nonfarm Employment monthly net jobs gain/loss was zero, which raises concerns of a double-dip recession. The overall BLS Employment Situation Summary indicates USA economic expansion has stalled. The report indicates a continued weak to very weak, but not yet disastrous, employment situation for the USA. The net jobs gain was comprised of +17,000 by the private sector and -17,000 by the government sector.

BLS Revisions to Prior Months Perhaps more disturbing were the downwards revisions of the prior 2 months of jobs data. For July, net jobs gains were originally reported as +117,000, which was revised downwards to +85,000 in this latest August report. For June, net jobs gains were originally reported as +18,000, then revised upwards to +46,000 in the July report, and now revised downwards to +20,000 in the August report. The net effect in the August report for the latest June and July revisions was a -30,000 jobs lost from the original reports. Therefore, net jobs creation this summer (June, July, August) was +105,000:
June (revised) +20,000
July (revised) +85,000
August (preliminary) 0
The problem is clear, the USA needs more than +105,000 jobs created each month and this was the entire net jobs gain for the summer.

[Editor's Note] Please note the unemployment rate is calculated by a household survey and the monthly net change in jobs (increase or decrease) is calculated by an employer survey. The household survey includes self-employed and farm workers, the employer survey does not include these. Overall, the jobs data (employer survey) has continued to indicate insufficient jobs growth to decrease the unemployment rate (household survey).

About the Bureau of Labor Statistics Mission: The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy. Its mission is to collect, analyze, and disseminate essential economic information to support public and private decision-making. As an independent statistical agency, BLS serves its diverse user communities by providing products and services that are objective, timely, accurate, and relevant. Vision: The Bureau of Labor Statistics will meet the information needs of a rapidly changing U.S. and global economy by continuously improving its products and services, investing in its work force, and modernizing its business processes.


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