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Overview of August 2 U.S. Jobs Report

The U.S. July jobs report seems to have been favourably viewed by the financial markets. However, at least the following things need to be factored into anyreasoned view with respect to it:

  • the reported unemployment rate increased fractionally to 8.3%. This is not good, and not likely good for President Obama in the context of this year's November 6 Presidential election;

  • June's previously released private payroll numbers were very poor, and have now been adjusted downward by 11,000 jobs. This shows the variability of reported statistics, and focuses on their reliability. Manufacturing jobs previously were 'officially reported' for June to have increased by 14,000. 11,000 is 79% of 14,000 - hardly insignificant in the context of 'reported statistics viability';

  • hourly earnings were reported as lower than expected. This is important because of the significance (generally thought to be about 70% of U.S. GDP) of U.S. consumer spending. One can't spend what one doesn't have;

  • growth in temporary jobs is stronger than growth in permanent jobs. This is important because it is only meaningful long-term permanent jobs that are will signal 'real U.S. economic recovery';

  • the July manufacturing jobs increase reported was, by one estimate, about 50% higher than it would have been due to seasonal deviations that may be reported (and reversed) in August; and,

  • at least one other survey, the U.S. government 'Household Employment Survey' showed a loss of jobs in July of 195,000 - a number wildly different than the job gains number of 163,000 reported in the 'official' U.S. jobs report.

Don't hold your breath on U.S. jobs recovery. The financial markets seemingly, in this instance at least, responded to what 'they wanted to hear'.

Topical Reference: July's jobs report is probably not as good as it seems, from Also Sprach Analyst, Walter Kurtz, August 4, 2012 - reading time 3 minutes; and June jobs report: Hiring weak, unemployment unchanged, from CNN Money, Annalyn Censky, July 6, 2012 - reading time 3 minutes.

 

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