The Market Ticker
Commentary on The Capital Markets- Category [Employment]
2015-07-02 08:01 by Karl Denninger
in Employment , 165 references
 

From the Bureau of Lies and Scams:

Total nonfarm payroll employment increased by 223,000 in June, and the unemployment rate declined to 5.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, retail trade, financial activities, and in transportation and warehousing.

Hmmm.....

First, let me dispose of the horsecrap that is being spewed by Zandi and others on CNBS (all the BS, all the time) right now.  They're claiming we need about 100,000 jobs a month to "keep up" with labor force expansion.  This is a bald lie; I present the population-adjusted employment delta every month.  Over the last 12 months the economy added 2.849 million working-age people to it.

Steve LIESman's (and the rest of the CNBS crew) claim is that we need "100,000" jobs a month, or 1.2 million a year, to absorb all the new entrants of working age.  He's lying and the numbers published every single month prove it -- not only is he lying he's radically lying, in that the real number over the last 12 months is 2.849 million.

This sort of outright bogus "reporting" is exactly as outrageous as was Brian Williams' "remembered" shelling that never happened (among others) and yet these jackclowns remain on the air.

Now, on to the data:

That's the actual population-corrected job addition number; it's negative this month by 308,000.  That is, over the last 12 months the economy added 308,000 more working-age people than it did jobs.  That's a fact, period, end of discussion.

The 12 month run-rate is down a bit; it still remains over 2 million but that's insufficient to make up for the addition of working-age people to the employment pool.

The participation rate ticked up one tenth while the "headline" rate ticked down.  That the participation rate is increasing a bit is good, but the fact that it remains a full three to four points under where it was during the 2000 decade, and another two points below the 1990s, is horrifyingly bad when it comes to government spending and, ultimately consumer spending sustainability.

There are a couple of troubling numbers in the internals of this report.  One of them is that women had their unemployment rate tick up -- especially young women.  The second is that both genders among teens (16-19) went from 17.8% -> 21.4% unemployment in one month, and this is the summer when employment for that age cohort tends to be at its best!  The reason appears to be a huge jump in their reported numbers, while employment itself rose as it more-or-less usually does for the month (in other words a hell of a lot of kids turned 16 in the last month.)  I'll ignore this for right now as it is wildly out of character with expectations and can be explained, but if it continues it does not portend good things.

One trend that is continuing and troubles me is that the jobs are, on balance, coming in low-skill areas.  The unemployment ratio for college graduates is stable but that among those without even a high school diploma is falling, as it is for those with just high school educations.  While those with college educations have a much better employment status to begin with if the economy is only adding low-skill, low-wage jobs then it's not doing a damn thing in terms of advancing household earnings capacity and in fact may be going the other way.

Incidentally, self-employed, unincorporated workers (small proprietors) decreased last month by 427,000.  That is a very, very bad number considering that entrepreneurship is the economic engine that powers growth.  If those people wound up pulling coffees at Starbucks (and it appears they did) it's a materially-large step down in terms of forward economic expectations -- if you're looking at the data with any sort of honest analysis.

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