Record 90.5 Million Out Of Labor Force As Half A Million Drop Out In One Month; Labor Force Participation Rate Plunges To 1978 Levels
Submitted by Tyler Durden on 09/06/2013 - 08:47
While the Establishment survey data was ugly due to both the miss and the prior downward revisions in the NFP print, the real action was in the Household survey, where we find that the number of people not in the labor force rose by a whopping 516,000 in one month, which in turn increased the total number of people outside the labor force to a record 90.5 million Americans. And what is even worse, the Labor Force Participation Rate declined from 63.4% to 63.2%: the is the lowest print since August 1978!
Real Unemployment Rate Rises To 11.4%, Difference Between Reported And Real Data Rises To Record
Submitted by Tyler Durden on 09/06/2013 - 09:04
As frequent readers know, for the past three years we have compiled data looking at the US unemployment rate assuming a realistic labor force participation rate, which is the trendline average of the past three decades, or in the mid-65% area. Using such an approach allows us to estimate what the true unemployment (U3, not U6 underemployment) rate is. We can report that as a result of the latest monthly collapse in the labor force whose only purpose was to lower the unemployment rate from 7.4% to 7.3%, the actual implied unemployment rate just rose from 11.2% to 11.4%. This can be seen on the chart below. Also can be seen that the spread between the reported manipulated unemployment rate and the real rate accounting for a realistic labor force participation, just hit a record high 4.1%. In other words, unemployment data manipulation by the BLS was never been greater in the history of the US than in the past month.Santelli Blasts Bad-Jobs Bullish Market Response: "What Are We A Banana Republic?"
Submitted by Tyler Durden on 09/06/2013 - 08:47
Bond yields snapped lower, equity prices surged higher, gold and silver prices ripped higher, and the USD snapped dramatically lower (as JPY surged) on the worse-than-expected payrolls print (and terrible downward revision). The sad reflection of bad-news-is-good-news reaction of US capital markets to this 'most important number in the world' is summed up perfectly by CNBC's Rick Santelli as he exclaims how sad this reaction is and asks "what are we a banana republic?" Well, yes, Rick, it appears we are...
http://www.zerohedge.com/news/2013-09-06/august-jobs-rise-169k-less-expected-unemployment-rate-73
August Jobs Rise 169K, Less Than Expected, Unemployment Rate 7.3%, Huge Downward Revision To July Print
A messy report out of the gate with the number of jobs added in August at 169K, or as predicted by ADP, worse than the 180K expected, however this was offset by the Unemployment Rate dropping from 7.4% to 7.3%, on expectations of an unchanged print.However what has shocked the market is the revision to the July jobs number from 162K to only 104K, resulting in a net drop of 74K jobs, and breaking the average 2013 jobs gain of 200K which previously was said by the Fed to be the key threshold level for tapering. The question now is: is this print bad enough to delay the taper?
From the report:
Total nonfarm payroll employment increased by 169,000 in August, about in line with the average monthly gain of 184,000 over the prior 12 months. In August, job growth occurred in retail trade and health care, while employment in information declined. Employment continued to trend up in food services and drinking places, professional and business services, and wholesale trade. (See table B-1.)Retail trade added 44,000 jobs in August and has added 393,000 jobs over the past 12 months. In August, job growth occurred in clothing stores (+14,000), food and beverage stores (+12,000), general merchandise stores (+9,000), and electronics and appliance stores (+4,000).Employment in health care increased by 33,000 in August. Within the industry, most of the job growth occurred in ambulatory care services (+27,000).In August, employment in professional and business services continued to trend up (+23,000). Over the past 12 months, this industry has added 614,000 jobs. Employment in temporary help services changed little in August.Within leisure and hospitality, employment in food services and drinking places continued to trend up in August (+21,000). Over the year, food services and drinking places has added 354,000 jobs.In August, wholesale trade employment continued to trend up (+8,000). This industry has added 83,000 jobs over the past 12 months.Within manufacturing, employment in motor vehicles and parts rose by 19,000 in August, after declining by 10,000 in July. Auto manufacturers laid off more workers for model changeover in July than in recent years. The return of laid-off workers contributed to the increase in August. Over the past 12 months, auto manufacturers have added 34,000 jobs.Within information, the motion picture and sound recording industry lost 22,000 jobs in August, following a gain of 8,000 in July.Employment in other major industries, including mining and logging, construction, transportation and warehousing, financial activities, and government, showed little or no change in August.The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour in August to 34.5 hours. In manufacturing, the workweek increased by 0.1 hour to 40.8 hours, and overtime increased by 0.2 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)In August, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $24.05. Over the year, average hourly earnings have risen by 52 cents, or 2.2 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $20.20. (See tables B-3 and B-8.)The change in total nonfarm payroll employment for June was revised from +188,000 to +172,000, and the change for July was revised from +162,000 to +104,000. With these revisions, employment gains in June and July combined were 74,000 less than previously reported.
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