The headlines in today’s jobs report were better than expected:
- Payrolls fell by “only” 247,000 in July, somewhat smaller than the 325,000 that analysts had anticipated.
- The unemployment rate ticked down to 9.4%.
If you dig into the numbers a bit further, you find some other encouraging nuggets:
- Job losses in May and June were 43,000 smaller than BLS had previously estimated.
- The average work week ticked up from 33.0 hours in June to 33.1 hours in July. That may seem like a small change, but it’s a good sign that hours have bounced off the record low recorded in June.
- Average hourly earnings increased 0.2%. Again not a huge change, but clearly pointing in the right direction.
- The U-6 measure of unemployment, which includes workers who are discouraged or working part-time for economic reasons, declined from 16.5% to 16.3%:
Losing 247,000 jobs is not a good month in the job market. But it is the best month since last August, before the fall of Lehman.
Some conservative columnists have pointed out that the BLS reduced the number of people looking for jobs by 796,000. If these people had not been removed, the unemployment rate would have been higher. Is this a legitimate point, or is this type of adjustment normal?
Looking at the release, I think the 796,000 figure is the number of discouraged workers in total in July. BLS estimates that in the same way it estimates the other unemployment-related statistics — by surveying households. As far as I know, nothing unusual in how the number was estimated.
Those workers are included in the U-6 rate in the chart.