Jack Dunn - Reclaiming Common Sense

One Million Part-time Jobs Lost - 385,000 Full-time Jobs Gained


The Jobs Report is one of the most anticipated reports on economic strength that we receive during the course of the month. Retail sales, the Consumer Price Index data, as well as new and existing hone data round out the top reports. The May Jobs Report was weak. The June Reportincluded the preliminary revision to the May data which indicated that we lost Seasonally Adjusted (SA) Private Sector Workers which ended President Obama's "Job Streak." The July Jobs Report confirmed the May Job loss wit the final revision to the May jobs numbers as well as overreported the SA Current Employment Statistics Private Sector Number. It should have reported a meager 155,000 SA Worker growth in the private sector.


It also needs to be noted that both job creation and worker additions have slowed on an annual basiswhen comparing same month, NSA data


Last Friday this column projected that we would see Real and Seasonally Adjusted Jobs Losses and Seasonally Adjusted Worker Gains. There is a huge difference between the Current Employment Statistics (CES) data which measures the levels of workers in the economy (the Establishment Data) and the Current Populations Survey (CPS) data which measure the level of jobs and unemployed workers (the Household Data.) The President's job streak relies upon the CES data. This column spends and equal amount of time of the CPS data as it does the CES data. The CPS data is used to calculate the the Unemployment rate and the Workforce Participation rate.


We need to pay attention to what is being reported. The cover of the jobs report illustrates changes in the non-farm payroll, seasonally adjusted. The President's Job Streak data has been referencing the Private Sector Worker changes.  The authors of the report live in the Government's Seasonally Adjusted World. We live in the non-seasonally adjusted world. The Bureau of Labor records the non-seasonally adjusted data and reports the seasonally adjusted data. We need to pay attention to the changes in full-time jobs, part-time jobs, and the number of unemployed workers. We also need to pay attention to the revisions of data from prior months. If last month's SA CES number is revised downward it allows for a bigger bounce upward.


The Headline Private Sector Number Could Have Been Reported at a Negative 15,000 Workers. The NSA CES data rose from the unrevised level of 123.262 million to 123.255 Million. The real worker number increased by 33,000 workers. The Seasonally adjusted value las month was revised down from 122.259 million and the August number was reported at 122.385 million for a net gain of 126,000 seasonally adjusted workers. The problem is that they boosted the seasonal factor to 0.9926193.  This is the highest seasonal factor used during the month of August since 1990. This seasonal factor was not even considered in the preparation of the Preview Column.


The NSA CES Worker Growth was a Paltry 0.03% - the Seasonally Adjusted Rate was 0.10%. This is roughly the same rate of NSA and SA CES job growth as last year. This is the lowest growth rate we have seen since 2004 without recording a contraction. We have to pay attention to the growth rate in jobs more so than the number of jobs added because as our economy grows the fractional change in the growth rate changes. Adding 200,000 jobs to an economy with 100 million workers versus 150,000 is a big difference.


The Number of Part-time Jobs recorded dropped by over 1 Million and reported a loss of 388,000 jobs. The number of Full-time jobs jumped by 385,000 jobs and was reported as improving by 411,000 jobs. The good news was that we did not lose seasonally adjusted jobs as we have six of the past ten years. The bad news is that we really did lose over 1 million part-time jobs. This is the highest level of lost part0time jobs during the month of August since 2003.


The Unemployment Rate Fell because the participation rate fell. You may hear a different value for the participation rate and the unemployment rate bantered about in the rest of the media. The good new from this report is that the participation rate is higher than it was last August. The bad news is that the number of unemployed workers is almost certainly higher than it is being reported. This will be covered in the Four Presidents at 92 Months Column next week. The official number of unemployed workers remains at roughly 8 million workers (7.996 million.)


Next week this column will dig further into the data. The data from this President will be compared to the data from the three prior two-term Presidents at the 92 month mark. This column will also report on the level of multiple job holders, focusing on those holding two or more part-time jobs. People who hold multiple jobs do not obtain unemployment benefits when they lose one of them, even if it is a full-time job.


The Annual CES Job Growth rate remains under 2%. It is the slowest Annual Growth rate during the month of August since 2011 and is comparable to what we were experiencing during 2006.  The economy is weakening.