The US Labor Department reported another new 1.763 million non farm paroll jobs in July. Unemployment and rise in non-farm payroll jobs as the Coronavirus hit the economy. The unemployment rate fell to 10.2% v. 10.6% estimate, Prior month 11.1%
The US Labor Department reported another new 1.763 million non farm paroll jobs in July. Unemployment and rise in non-farm payroll jobs as the Coronavirus hit the economy. The unemployment rate fell to 10.2% v. 10.6% estimate, Prior month 11.1%
July 2020 U.S. Employment Report
The Covid-19 virus has wreaked havoc on the global economy. The world’s economy as shut down and much of America has stay at home orders. Jobless claims numbers have been records and unfortunately the story is much worse as people have not all been able to file. The May and June reports however were a surprise gain in jobs. The expectation was for more recovery in job losses for July.
The market expected the July report released Friday to see nonfarm payrolls rise 1.3 million with the recovering economy. The ADP report this week showed private hiring at just 167,000 jobs. Last month NFP came in with gains of 4,800,000 Logic suggests more volatility in the hiring data. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 10.2% now.
Even as jobs seem to be coming back, states are still trying to catch up with claims for unemployment insurance. That weekly number also camess out Thursday at 1,186,000 with another 1.38 million new claims even as jobs on net are brought back. The discrepancy is part a backlog at the state level and possible counting errors under a special program targeted at pandemic-related claims, according to a Bloomberg News report Wednesday.
July 2020 US Employment Report Expectations
Employment:
- Non-farm payrolls 1,763,000 vs 1,300,000 expected, Prior 4,800,000K (revised to )
- Unemployment rate 10.1% vs 10.5% expected/prior 11.1%
- Participation rate 61.4 vs 61.8% exp 61.5% prior (63.3% highest since 2014)
- Underemployment rate 16.5% vs 16.7% Exp 18 % prior
- Two month net revision +17k Prior +90k
- Manufacturing payrolls +26k vs +255k exp 356k prior
- Private payrolls +1462k vs +1,300k exp +4,667k prior
Wages:
- Average hourly earnings +0.2% m/m v -0.7% Expected -1.0% m/m Prior
- Average hourly earnings +4.8% y/y v 5.0% Prior Expected
- Average weekly hours 34.5 v prev 34.5 Expected/Prior
Household Survey Data
In July, the unemployment rate declined by 0.9 percentage point to 10.2 percent, and the number of unemployed persons fell by 1.4 million to 16.3 million. Despite declines over the past 3 months, these measures are up by 6.7 percentage points and 10.6 million, respectively, since February.
Among the major worker groups, the unemployment rates declined in July for adult men (9.4 percent), adult women (10.5 percent), teenagers (19.3 percent), Whites (9.2 percent), Asians (12.0 percent), and Hispanics (12.9 percent). The jobless rate for Blacks (14.6 percent) showed little change over the month.
The number of unemployed persons who were on temporary layoff decreased by 1.3 million in July to 9.2 million, about half its April level. In July, the number of permanent job losers and the number of unemployed reentrantsto the labor force were virtually unchanged over the month, at 2.9 million and 2.4 million, respectively. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)
Among the unemployed, those who were joblessless than 5 weeks increased by 364,000 to 3.2 million in July, and the number of persons jobless 15 to 26 weeks rose by 4.6 million to 6.5 million. By contrast, the number of unemployed persons who were jobless 5 to 14 weeks fell by 6.3 million to 5.2 million. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.5 million, was little changed over the month.
The labor force participation rate, at 61.4 percent, changed little in July, following increases in May and June. Total employment, as measured by the household survey, rose by 1.4 million in July to 143.5 million. The employment-population ratio rose by 0.5 percentage point to 55.1 percent but remains lower than in February (61.1 percent).
In July, the number of persons who usually work part time rose by 803,000 to 24.0 million, while the number who usually work full time, at 119.5 million, was little changed.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 619,000 to 8.4 million in July, reflecting a decline in the number of people whose hours were cut due to slack work or business conditions (-658,000). The number of involuntary part-time workers is 4.1 million higher than in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time.
In July, the number of persons not in the labor force who currently want a job declined by 463,000 to 7.7 million; this measure is 2.8 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Among those not in the labor force who currently want a job, persons marginally attached to the labor force fell by 492,000 to 2.0 million in July. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 665,000 in July, essentially unchanged from the previous month.
Establishment Survey Data
Total nonfarm payroll employment rose by 1.8 million in July, less than the increases of 4.8 million in June and 2.7 million in May. In July, nonfarm employment was lower than its February level by 12.9 million, or 8.4 percent. The largest employment increases in July occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.
Employment in leisure and hospitality increased by 592,000, accounting for about one-third of the gain in total nonfarm employment in July. Employment in food services and drinking places rose by 502,000, following gains of 2.9 million in May and June combined. Despite the gains over the last 3 months, employment in food services and drinking places is down by 2.6 million since February. Over the month, employment also rose in amusements, gambling, and recreation (+100,000).
Government employment rose by 301,000 in July but is 1.1 million below its February level. Typically, public-sector education employment declines in July (before seasonal adjustment). However, employment declines occurred earlier than usual this year due to the pandemic, resulting in unusually large July increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment. A July job gain in federal government (+27,000) reflected the hiring of temporary workers for the 2020 Census. In July, retail trade added 258,000 jobs.
Employment in the industry is 913,000 lower than in February. In July, nearly half of the job gain in retail trade occurred in clothing and clothing accessories stores (+121,000). By contrast, the component of general merchandise stores that includes warehouse clubs and supercenters lost jobs (-64,000). Employment in professional and business services increased in July (+170,000) but remains 1.6 million below its February level.
The majority of July’s gain occurred in temporary help services (+144,000). In July, the other services industry added 149,000 jobs, with most of the increase occurring in personal and laundry services (+119,000). Since February, employment in other services is down by 627,000. In July, health care added 126,000 jobs, with employment growth in offices of dentists (+45,000), hospitals (+27,000), offices of physicians (+26,000), and home health care services (+16,000).
Job losses continued in nursing and residential care facilities (-28,000). Employment in health care is down by 797,000 since February. In July, employment in social assistance increased by 66,000, with child day care services accounting for most of the gain (+45,000). Employment in social assistance is 460,000 lower than in February. Employment in transportation and warehousing rose by 38,000 in July, following an increase of 87,000 in June.
Despite job gains over the past 2 months, employment in the industry is down by 470,000 since a recent peak in January. In July, employment rose in transit and ground passenger transportation (+20,000), air transportation (+16,000), and couriers and messengers (+9,000). Manufacturing employment increased by 26,000 in July.
An employment gain in motor vehicles and parts (+39,000) was partially offset by losses in fabricated metal products (-11,000), machinery (-7,000), and computer and electronic products (-6,000). Although manufacturing has added 623,000 jobs over the past 3 months, employment is 740,000 lower than in February. Financial activities added 21,000 jobs in July, with most of the gain in real estate and rental and leasing (+15,000). Since February, employment in financial activities is down by 216,000.
In July, construction employment changed little (+20,000), following job gains of 619,000 in May and June combined. However, employment in the industry remains 444,000 below its February level. Mining continued to shed jobs in July (-7,000), reflecting a loss in support activities for mining (-11,000). Mining has lost 127,000 jobs since a recent peak in January 2019, although nearly three-fourths of this decline has occurred since February 2020. In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $29.39, following large changes in recent months. Average hourly earnings of private-sector production and nonsupervisory employees decreased by 11 cents to $24.63 in July.
The large employment fluctuations—especially in lower-paid industries—over the past several months complicate the analysis of recent trends in average hourly earnings. (See tables B-3 and B-8.)
The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.5 hours in July. In manufacturing, the workweek rose by 0.7 hour to 39.7 hours, and overtime increased by 0.3 hour to 2.8 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.0 hours. (See tables B-2 and B-7.)
The change in total nonfarm payroll employment for May was revised up by 26,000, from +2,699,000 to +2,725,000, and the change for June was revised down by 9,000, from +4,800,000 to +4,791,000. With these revisions, employment in May and June combined was 17,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
The Employment Situation for August is scheduled to be released on Friday, September 4, 2020
Recap June 2020 US Employment Report
Employment:
- Non-farm payrolls 4,800,000 vs 2,900,000 expected, Prior 2,700,000K (revised to 190k)
- Unemployment rate 11.1% vs 12.5% expected/prior 14.7%
- Participation rate 61.5% vs 61.2% exp 60.8% prior (63.3% highest since 2014)
- Underemployment rate 18% vs 21.2 % prior
- Two month net revision +90k Prior -642k
- Manufacturing payrolls +356k vs +255k exp prior
- Private payrolls +4767k vs +3000k exp prior
- leisure and hospitality vs.+1239m last month
- Retail trade K vs +368K last month
- Education, health K vs +424K last month
- Business services K vs.+127k last month
- Construction jobs K vs +464K last month
- Government jobs K vs -585K last month
- Financial K va +33K last month
- Information K vs 38K last month
- Trade, transport K vs +368K last month
Wages:
- Average hourly earnings -1.0% m/m v -1.0% m/m Prior Expected
- Average hourly earnings +5.0% y/y v 6.7% Prior 5.3% Expected
- Average weekly hours 34.5 v 34.7 prev 34.5 Expected
Household Survey Data
The unemployment rate declined by 2.2 percentage points to 11.1 percent in June, and the number of unemployed persons fell by 3.2 million to 17.8 million. Although unemployment fell in May and June, the jobless rate and the number of unemployed are up by 7.6 percentage points and 12.0 million,
Among the major worker groups, the unemployment rates declined in June for adult men (10.2 percent), adult women (11.2 percent), teenagers (23.2 percent), Whites (10.1 percent), Blacks (15.4 percent), and Hispanics (14.5 percent). The jobless rate for Asians (13.8 percent) changed little over the month.
The number of unemployed persons who were on temporary layoff decreased by 4.8 million in June to 10.6 million, following a decline of 2.7 million in May. The number of permanent job losers continued to rise, increasing by 588,000 to 2.9 million in June. The number of unemployed reentrants to the labor force rose by 711,000 to 2.4 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)
The number of unemployed persons who were jobless less than 5 weeksdeclined by 1.0 million to 2.8 million in June. Unemployed persons who were jobless 5 to 14 weeks numbered 11.5 million, down by 3.3 million over the month, and accounted for 65.2 percent of the unemployed. By contrast, the number of persons jobless 15 to 26 weeks and the long-term unemployed (those jobless for 27 weeks or more) saw over-the-month increases (+825,000 to 1.9 million and +227,000 to 1.4 million, respectively).
The labor force participation rate increased by 0.7 percentage point in June to 61.5 percent, but is 1.9 percentage points below its February level. Total employment, as measured by the household survey, rose by 4.9 million to 142.2 million in June. The employment-population ratio, at 54.6 percent, rose by 1.8 percentage points over the month but is 6.5 percentage points lower than in February.
In June, the number of persons who usually work full time increased by 2.4 million to 118.9 million, and the number who usually work part time also rose by 2.4 million to 23.2 million.
The number of persons employed part time for economic reasons declined by 1.6 million to 9.1 million in June but is still more than double its February level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time.
The number of persons not in the labor force who currently want a job, at 8.2 million, declined by 767,000 in June but remained 3.2 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Persons marginally attached to the labor force—a subset of persons not in the labor force who currently want a job—numbered 2.5 million in June, little different from the prior month. These individuals were not in the labor force, wanted and were available for work, and had looked forEstablishment Survey DataTotal nonfarm payroll employment increased by 4.8 million in June, following an increase of 2.7 million in May. These gains reflect a partial resumption of economic activity that had been curtailed due to the coronavirus pandemic in April and March, when employment fell by a total of 22.2 million in the 2 months combined
In June, nonfarm employment was 14.7 million, or 9.6 percent, lower than its February level. Employment in leisure and hospitality rose sharply in June. Notable job gains also occurred in retail trade, education and health services, other services, manufacturing, and professional and business services. Employment continued to decline in mining. (See table B-1. For more information about how the establishment survey and its measures were affected by the coronavirus pandemic, see the box note on page 5.) In June, employment in leisure and hospitality increased by 2.1 million, accounting for about two-fifths of the gain in total nonfarm employment.
Over the month, employment in food services and drinking places rose by 1.5 million, following a gain of the same magnitude in May. Despite these gains, employment in food services and drinking places is down by 3.1 million since February. Employment also rose in June in amusements, gambling, and recreation (+353,000) and in the accommodation industry (+239,000).
In June, employment in retail trade rose by 740,000, after a gain of 372,000 in May and losses totaling2.4 million in March and April combined. On net, employment in the industry is 1.3 million lower than in February. In June, notable job gains occurred in clothing and clothing accessories stores (+202,000), general merchandise stores (+108,000), furniture and home furnishings stores (+84,000), and motor vehicle and parts dealers (+84,000). Employment increased by 568,000 in education and health services in June but is 1.8 million below February’s level. Health care employment increased by 358,000 over the month, with gains in offices of dentists (+190,000), offices of physicians (+80,000), and offices of other health practitioners (+48,000).
Elsewhere in health care, job losses continued in nursing care facilities (-18,000). Employment increased in the social assistance industry (+117,000), reflecting gains in child day care services (+80,000) and in individual and family services (+28,000). Employment in private education rose by 93,000 over the month. Employment increased in the other services industry in June (+357,000), with about three-fourths of the increase occurring in personal and laundry services (+264,000). Since February, employment in the other services industry is down by 752,000.
In June, manufacturing employment rose by 356,000 but is down by 757,000 since February. June employment increases were concentrated in the durable goods component, with motor vehicles and parts (+196,000) accounting for over half of the job gain in manufacturing. Employment also increased over the month in miscellaneous durable goods manufacturing (+26,000) and machinery (+18,000). Within the nondurable goods component, the largest job gain occurred in plastics and rubber products (+22,000).
Professional and business services added 306,000 jobs in June, but employment is 1.8 million below its February level. In June, employment rose in temporary help services (+149,000), services to buildings and dwellings (+53,000), and accounting and bookkeeping services (+18,000). By contrast, employment declined in computer systems design and related services (-20,000). -4-Construction employment increased by 158,000 in June, following a gain of 453,000 in May. These gains accounted for more than half of the decline in March and April (-1.1 million combined).
Over-the-month gains occurred in specialty trade contractors (+135,000), with growth about equally split between the residential and nonresidential components. Job gains also occurred in construction of buildings (+32,000). Transportation and warehousing added 99,000 jobs in June, following declines in the prior 2 months (-588,000 in April and May combined). In June, employment rose in warehousing and storage (+61,000), couriers and messengers (+21,000), truck transportation (+8,000), and support activities for transportation (+7,000). Wholesale trade employment rose by 68,000 in June but is down by 317,000 since February. In June, job gains occurred in the durable goods (+39,000) and nondurable goods (+27,000) components. Financial activities added 32,000 jobs in June, with over half of the gain in real estate (+18,000).
Since February, employment in financial activities is down by 237,000. Government employment changed little in June (+33,000), as job gains in local government education (+70,000) were partially offset by job losses in state government (-25,000). Government employment is 1.5 million below its February level. Mining continued to lose jobs in June (-10,000), with most of the decline occurring in support activities for mining (-7,000). Mining employment is down by 123,000 since a recent peak in January 2019, although nearly three-fourths of the decline has occurred since February 2020. In June, average hourly earnings for all employees on private nonfarm payrolls fell by 35 cents to $29.37.
Average hourly earnings of private-sector production and nonsupervisory employeesdecreased by 23 cents to $24.74 in June. The decreases in average hourly earnings largely reflect job gains among lower-paid workers; these changes put downward pressure on the average hourly earnings estimates. (See tables B-3 and B-8.) The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour to 34.5 hours in June. In manufacturing, the workweek rose by 0.5 hour to 39.2 hours, and overtime was unchanged at 2.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls fell by 0.2 hour to 33.9 hours.
The recent employment changes, especially in industries with shorter workweeks, complicate monthly comparisons of the average weekly hours estimates. (See tables B-2 and B-7.) The change in total nonfarm payroll employment for April was revised down by 100,000, from -20.7 million to -20.8 million, and the change for May was revised up by 190,000, from +2.5 million to +2.7 million. With these revisions, employment in April and May combined was 90,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) _____________
The Employment Situation for July is scheduled to be released on Friday, August 7, 2020, at 8:30 a.m. (ET).
June ADP Private Payrolls
- June private payrolls rose by 2.369 milliona, under the 2.5 million estimate from economists surveyed by Dow Jones
- May was revised dramatically higher, from an initially reported loss of 2.76 million to a gain of 3.065 million jobs.
“There is no information in that revision. It is simply the result of the fact that our objective here is to predict the [Bureau of Labor Statistics] number with the ADP data and to do that as accurately as possible,” said Mark Zandi, chief economist at Moody’s Analytics. “You can’t glean from that that something positive is happening in the labor market.” Zandi however noted “it looks like an economic recovery began in June.”
“Small business hiring picked up in the month of June,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses.”
- Small businesses overall added 937,000
- Companies with 500 or more workers were up 873,000
- Medium-sized firms added 559,000.
- Hospitality industry workers had the biggest gain, with 961,000 hires
- Construction added 394,000
- Manufacturing rose by 88,000.
- The goods sector in total saw a net gain of 457,000 positions.
- Services side grew by 1.912 million,
- Ttrade, tansportation and utilities (288,000)
- Education and health services (283,000)
- “other services” category (215,000).
- Professional and businesses services added 151,000
- Financial activities was up 65,000.
Source: AFP, Challanger, DOL, TradersCommunity Data, BLS
From The TraderCommunity Research Desk