Monthly Employment Reports Becoming Increasingly Deceptive

July 13th, 2013 | by Morris Beschloss | Comments

Although financial markets are increasingly tantalized by monthly employment statistics, the U.S. Labor Department’s overly simplistic numbers are becoming ever more confusing. During a time frame when the nation’s employment problems have taken center stage, the personnel numbers added for the month, without any indication of those dropping out of the workforce, or reduced to part-time status, present a distorted conclusion.

Although a breakdown by such employment sectors as manufacturing, construction, various service sub-segments and government jobs are available, “trigger-happy” stock and bond traders don’t wait for such esoteric confusion, and react quickly to the top number. This is true also of the tens of millions of observers, who believe that unemployment is shrinking; and that its ongoing negative impact on America’s economy and welfare is now on the mend.

A comprehensive reading of the June employment status indicates no improvement. In fact, it actually worsened, when one realizes that 10,000 prospective workers enter the employment market every day. This is magnified by the fact that 322,000 were shifted out of full-time jobs, exacerbated by employers anticipating the Obamacare health benefit package that will add unacceptable costs to their bottom lines. This fast-growing number of job losses is on the way to 10 million, as such increasing amount is swelled by the millions of unemployed that are now seeking part-time work.

The two indexes that best project the real world of America’s employment are the civilian labor force participation rate (63.5%) and the employment/population ratio (58.7%). Both changed imperceptibly in June. On a year-to-year basis, labor force participation actually worsened by 0.3%. Also adding to the downside were the legion of discouraged dropouts that have increased by 206,000 from the year earlier.

Among the major working groups, the following unemployment breakdown indicates adult women (6.8%), adult men (7.0%), teenagers (14%), whites (6.6%), blacks (13.7%) and Hispanics (9.1%) showed little improvement. The jobless rates for Asians (5%) was the only segment which showed marked improvement, coming down from 6.3% the year before.

Other significant June results indicated that government employment of all types in June dropped by 5,000, continuing a one-year decline that has now reached 65,000. Even though April and May reports were revised to nearly 70,000, there is little indication that the current trend anticipates increased momentum. Manufacturing employment, which had increased in 2012′s second half, seems to have lost its fizz recently. Only retail trades’ employment numbers made impressive gains in June (37,000), while increased construction workers benefitted by both foreign and domestic monetary liquidity focusing on the residential construction sector.

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