2010 Economic Calendar
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Employment Situation
Released On 8/6/2010 8:30:00 AM For Jul, 2010
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm Payrolls - M/M change-125,000 -221,000 -70,000 -150,000  to 0 -131,000 
Unemployment Rate - Level9.5 %9.6 %9.3 % to 9.7 %9.5 %
Average Hourly Earnings - M/M change-0.1 %0.0 %0.2 %0.0 % to 0.3 %0.2 %
Av Workweek - All Employees34.1 hrs34.1 hrs34.1 hrs to 34.2 hrs34.2 hrs
Private Payrolls - M/M change83,000 31,000 100,000 50,000  to 140,000 71,000 

Highlights
The July jobs report disappointed and weakness was largely in the government sector and it was not all just temporary Census workers being laid off. But there were a few bright spots, including gains in wages, the workweek, and earnings. Overall payroll jobs in July declined 131,000 after falling a revised 221,000 in June and after a 432,000 boost in May. The decline in July was worse than the market forecast for a 125,000 decline. The May and June revisions were net down 97,000.

Turning to the household survey, the unemployment rate was unchanged at 9.5 percent in July.

For detail in the payroll numbers, the big weakness in July came from a 202,000 drop in government jobs, following a 252,000 fall the month before. Of the July government plunge, 143,000 came from a drop in Census Bureau payrolls.

Private nonfarm employment, which discounts the effects of hiring and firing temporary Census workers, accelerated moderately to a 71,000 increase, following a 31,000 gain in June. The latest number came in below the consensus expectation for a 100,000 boost in private payrolls. Improvement was evenly divided between the goods-producing and services-providing sectors. Good-producing rose 33,000 with manufacturing up 36,000, mining up 7,000, and construction down 11,000. Services-providing jobs rose 38,000 with strength led by health care, up 27, 000, and transportation & warehousing, up 12,000.

There were some notable positives in the latest employment report. Average hourly earnings improved to up 0.2 percent, following no change in June and matching the market projection for a 0.2 percent gain. The average workweek for all workers rose to 34.2 hours from 34.1 hours in June. Analysts had called for 34.1 hours. Aggregate weekly earnings are a positive for July personal income, jumping 0.6 percent after dipping 0.3 percent in June.

On a year-ago basis, overall payroll jobs came in at unchanged in July, improved from down 0.2 percent in June.

On the news, equity futures dipped and Treasury rates eased. Although the headline payroll number disappointed, the private sector detail was not so negative. Now, it appears that the government sector in terms of employment is a drag on the economy which should not be a surprise given revenue shortfalls for state and local governments.

Market Consensus before announcement
Nonfarm payroll employment in June fell back 125,000 after spiking a revised 433,000 in May and after a 313,000 jump in April. Discounting the temporary effects of Census hiring and firing, private nonfarm employment increased 83,000, following a 33,000 rise in May. The big weakness, of course, was a 208,000 drop in government jobs after a 400,000 jump in May. The decline included the loss of 225,000 temporary employees working on Census 2010. Average hourly earnings dipped 0.1 percent, following a 0.2 percent boost in May. The average workweek for all workers edged down to 34.1 hours compared to 34.2 hours in May. Due a sharp drop in the labor force, the unemployment rate fell to 9.5 percent in June from 9.7 percent in May. Looking ahead, the headline number for payroll jobs likely will be sluggish or even negative as Census still had 339,000 temporary workers remaining on the Census payroll in June still to be laid off.

Definition
The employment situation is a set of labor market indicators based on two separate surveys in this one report. The unemployment rate equals the number of unemployed persons divided by the total number of persons in the labor force, which comes from a survey of 60,000 households (this is called the household survey). Workers are only counted once, no matter how many jobs they have, or whether they are only working part-time. In order to be counted as unemployed, one must be actively looking for work. Other commonly known figures from the Household Survey include the labor supply and discouraged workers.  Why Investors Care
 
[Chart]
During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month.
Data Source: Haver Analytics
 
[Chart]
The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy.
Data Source: Haver Analytics
 

 

2010 Release Schedule
Released On: 1/82/53/54/25/76/47/28/69/310/811/512/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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