Economics news, commentary, research: Unemployment in August 2014

http://bloomberg.econoday.com/byshoweventfull.asp?fid=461122&cust=bloomberg-us&year=2014&lid=0&prev=/byweek.asp#top

2014 Economic Calendar

Resource Center » Event Release Dates | Event Definitions | Today's Calendar

Employment Situation

Released On 9/5/2014 8:30:00 AM For Aug, 2014

	Prior	Prior Revised	Consensus	Consensus Range	Actual
Nonfarm Payrolls - M/M change	209,000	212,000	230,000	195,000 to 279,000	142,000
Unemployment Rate - Level	6.2 %		6.1 %	6.0 % to 6.2 %	6.1 %
Average Hourly Earnings - M/M change	0.0 %		0.2 %	0.1 % to 0.3 %	0.2 %
Av Workweek - All Employees	34.5 hrs		34.5 hrs	34.5 hrs to 34.6 hrs	34.5 hrs
Private Payrolls - M/M change	198,000	213,000	220,000	187,000 to 270,000	134,000

Highlights
The employment situation for August was notably disappointing. But some commentators note that August is a very revisable number.

Payroll jobs rose only 142,000, after a 212,000 increase in July and 267,000 boost in June. Net revisions for June and July were down 28,000. Market expectations for August were for a 230,000 gain.

The unemployment rate eased back to 6.1 percent from 6.2 percent in July. Expectations were for 6.1 percent.

Going back to the payroll report, private payrolls rose 134,000 in August after a 213,000 gain in July. Professional and business services added 47,000 jobs in August. Employment in health care increased by 34,000 in August. Within leisure and hospitality, employment in food services and drinking places continued to trend up in August (+22,000). Construction employment continued to trend up in August (+20,000).

Manufacturing employment was unchanged in August, following an increase of 28,000 in July. Motor vehicles and parts lost 5,000 jobs in August, after adding 13,000 jobs in July. Auto manufacturers laid off fewer workers than usual for factory retooling in July, and fewer workers than usual were recalled in August.

Average hourly earnings rose 0.2 percent, matching expectations and improving over July's 0.1 percent. Average weekly hours were unchanged at 34.5 hours.

Overall, the latest numbers bolster the arguments for Fed doves to keep policy loose. On the news, equity futures rose and were less negative.

Market Consensus before announcement
Nonfarm payroll employment was on the soft side in July but still moderately positive. Total nonfarm payroll jobs rose 209,000 in July after a 298,000 gain in June and a 229,000 rise in May. The net revision for the prior two months was up 15,000. The unemployment rate nudged up to 6.2 percent from 6.1 percent in June. Expectations were for 6.1 percent. The expanded underemployment rate ("U-6") rose to 12.2 percent from 12.1 percent in June. Turning back to the payroll report, private jobs advanced 198,000 after a 270,000 increase the month before. Analysts forecast 233,000. It was the goods-producing sector that was relatively healthy, gaining 58,000 in July, following a 38,000 rise in June. Both manufacturing and construction were healthy. Average weekly hours were unchanged at 34.5 hours. Growth in average hourly earnings was flat at 0.0 percent after a 0.2 percent rise in June.

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

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

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

Please note: Your browser must display iFrames to view the Interactive charts.

2014 Release Schedule

Released On: