In other words, this is unexpected:
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.
Expect the markets to act unexpectedly, too. After yesterday’s ADP report, the markets predicted a gain of 100,000 jobs and a steady jobless rate. This will send markets reeling.
Let’s take a look at more of the report:
The number of unemployed persons (14.1 million) and the unemployment rate (9.2 percent) were essentially unchanged over the month. Since March, the number of unemployed persons has increased by 545,000, and the unemployment rate has risen by 0.4 percentage point. The labor force, at 153.4 million, changed little over the month. …
The number of persons unemployed for less than 5 weeks increased by 412,000 in June. The number of long-term unemployed (those jobless for 27 weeks and over) was essentially unchanged over the month, at 6.3 million, and accounted for 44.4 percent of the unemployed.
The civilian labor force participation rate was little changed in June at 64.1 percent. The employment-population ratio decreased by 0.2 percentage point to 58.2 percent.
In other words, we’re not heading into another Recovery Summer. We are still drifting downward on the overall labor-force participation figures, and the jobless rate is rising, not falling. The number of long-term unemployed hasn’t gotten smaller while the number of short-term unemployed has risen sharply. That’s a sign of contraction in an already-poor economy, and it’s a pretty good indicator that we slipped closer to zero growth or worse in Q2.
Just before this report was released, the White House announced that Barack Obama would address the unemployment report at 10:35 ET today. What will he say? This is another “road bump” on the way to prosperity?
Reuters reports that either hopes of economic recovery are “dashed” or “dampened,” depending on whether one reads the headline or the story itself:
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers innine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists’ expectations for a 90,000 rise.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.
The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.
Reuters also notes that the Labor report revises the April and May figures downward by a total of 44,000 jobs, which erodes the weak job growth in Q2 even further. The private sector did add 57,000, or about half of what is needed for population growth, while government at all levels shed 39,000 jobs. Construction fell 9,000, while factories added 6,000 jobs. The average hours per workweek declined slightly, which means that we’re losing efficiency as well as jobs, and that will mean that businesses have room to add hours before creating new positions.
Does this report put any pressure on ADP to explain its latest report, which showed 157,000 private-sector jobs being added in June?
There was a little girl who had a little curl
Right in the middle of her forehead;
When she was good, she was very, very good,
And when she was bad she was horrid.
ADP, Flip says, is either quite close or way, way off, and it’s about a 50-50 proposition. Either way, they almost always overestimate private-sector job growth.