Friday, August 1, 2008

NFP down 51k in July 2008

From the news release 'The Employment Situation in July 2008':
The unemployment rate rose to 5.7 percent, and nonfarm payroll employment continued to trend down in July (-51,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment continued to fall in construction, manufacturing, and several service-providing industries, while health care and mining continued to add jobs. Average hourly earnings rose by 6 cents, or 0.3 percent, over the month.

Non seasonally adjusted employment in the service-providing industry shed 1.4 mln jobs in July from a month earlier. Seasonally adjusted this number is reduced to 5k jobs lost during the month. This is entirely due to school schedule seasonal adjustments since local government employment including education lost 1.16 mln jobs during the month of July. Employment continued to fall in a variety of service-providing industries although gernerally to a lesser degree than in education. Employment services and temporary help services shed 70k and 65k jobs respectively in July. Seasonally adjusted the job losses are smaller at 34k and 29k respectively. Health care on the other hand added 35k n.s.a. and 32.9k jobs s.a. in July.

The Finacial services industry has lost about 116k jobs in during the year to July 2008. Seasonally adjusted this industry lost 118k jobs in a year. Most of this job losses are in the credit intermediation and related activities industry. This industry has lost only 3.8k jobs during the month of July. Maybe a sign of stabilisation in the sector. The investment house Morgan Stanley yesterday announced plans for a "hiring spree". Not surprisingly the real estate industry lost about 2.4k jobs during the month and about 30k jobs in the last 12 month.

The continued uncertainty in the commercial construction business is not reflected in employment at the architectural and engineering services industry. This industry created about 10k jobs n.s.a. and about 2.1k seasonally adjusted jobs.

A disturbing sign is the increase in people working part time for economic reasons, which has increased from 5.69 mln (n.s.a.) in June to 6.05 mln (n.s.a.) in July. Seasonally adjusted 308k more people opted to work part time for economic reasons during the month of July.
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The Diffusion index is also weakening, with the 3-month span below 50 fro 7 month in a row. The 12-month difussion index is also below 50 for 3 straight month. A reading below 50 indicates that more businesses are laying off workers than hiring. This index has not reached the through levels of the 2001 recession yet, I suspect that hirings will pick up somewhat or at the very least stabilize in the second half of the year.
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The last chart compares the historic average weekly hours of production workers for different industries. In July, the average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.6 hours, seasonally adjusted. On a positive note goods producing and computer and electronic products are holding up very well with AWH above 40 and 41 respectively. Machinery peaked at 43 at the beginning of 2008 but has since declined to 42. Retail trade is a real negative and shows continued decline with a low of 30 in July 2008.

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In July, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 6 cents, or 0.3 percent, to $18.06, seasonally adjusted. Over the past 12 months, average hourly earnings increased by 3.4 percent.


Bureau of Labor Statistics

read also: NFP down 62k in June 2008
Thursday, July 3, 2008

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