Jobs Report at a Glance Here is an overview of today's numbers.
- US Payrolls +0
- US Unemployment Rate Flat at 9.1%
- Participation Rate +.1 to 64.0%
- Actual number of Employed (by Household Survey) rose by 331,000
- Unemployment rose by 36,000
- Those not in the labor force dropped by 165,000
- Civilian population rose by 200,000, Labor Force rose by 366,000
- Average Weekly Workweek Fell .1 hours to 34.2 hours
- Average Private Hourly Earnings Fell 3 Cents
- Government employment decreased by 17,000 - Not Enough
Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.
For a change, the labor force actually rose today. This is a welcome sign. However, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.
August 2011 Jobs Report Please consider the Bureau of Labor Statistics (BLS)
August 2011 Employment Report.
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 - Seasonally Adjusted 
Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted 
Notice that employment is lower than it was 10 years ago.
Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted 
click on chart for sharper image Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs. Ignoring the effects of the census, in the last 11 months of a recovery 2+ years old, the economy averaged about 117,000 jobs a month. That is very poor as recoveries go.
In the last 4 months the economy has averaged 40,000 jobs a month, a downright pathetic number.
Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.
Nonfarm Employment - Payroll Survey Details - Seasonally Adjusted 
Average Weekly Hours 
Index of Aggregate Weekly Hours 
Average Hourly Earnings vs. CPI 
"Success" of QE2 Over the past 12 months, average hourly earnings have increased by 1.9 percent. The Consumer Price Index for All Urban Consumers (CPI-U) was up 3.6 percent over the year ending in July.
Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed.
BLS Birth-Death Model Black Box The BLS
Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.
The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers.
For more details please see
Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.
The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.
The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.
Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way. Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.
Birth Death Model Adjustments For 2011 
BLS Back in Outer-Space Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid. However, in my estimation the BLS is back in outer-space.
It is clear the economy is slowing and the BLS model has not picked it up. The model is horrendously wrong at economic turns.
-18,000 may look reasonable but bear in mind that January and July are revision months where the BLS adjusts for prior errors. I believe the BLS has missed another economic turn, and the BLS is terribly wrong following turns.
Household Data 
click on chart for sharper image In the last year, the civilian population rose by 1,772,000. Yet the labor force
dropped by 523,000. Those not in the labor force rose by 2,295,000.
Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.
Table A-8 Part Time Status 
click on chart for sharper image There has been no improvement in part-time employment in a full year. 8.8+ million workers want a full time job and cannot find one.
Table A-15 Table A-15 is where one can find a better approximation of what the unemployment rate really is.
click on chart for sharper image Distorted Statistics Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is hard to discuss the numbers.
The official unemployment rate is 9.1%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
While the "official" unemployment rate is an unacceptable 9.1%, U-6 is much higher at 16.2%.
Things are much worse than the reported numbers would have you believe. Moreover, the unemployment rate is barely better than it was a year ago. It would actually be worse than a year ago were it not for people dropping out of the labor force.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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