The June non-farm payroll numbers are deeply below consensus forecast. The Bureau of Labor Statistics (BLS) reports that non-farm payrolls expanded by 18,000 in June. The BLS narrow U-3 unemployment rate is now 9.2%; it was 9.1% after the May report. The BLS broad measure of unemployment, U-6 including involuntary part time workers and discouraged workers, rose to 16.2% in June from 15.8% in May. This is 85% below the Bloomberg and Dow Jones average forecasts for over 120,000 jobs. We also saw April and May jobs creation revised down. We have had 545,000 people added to employment across the period April-June 2011. These are significantly weaker numbers than the May report, +54,000.
We continue to see significant weakness in public sector employment, led by local public sector job losses. Public sector employment contracted by 39,000 jobs in June. Federal stimulus is declining and states and localities are feeling the pinch. State difficulties and budget issues are being passed along to municipalities. In June we continued to see heavy reductions in local employment, particularly education employees. Local governments reduced payrolls by 18,000 in June. 12,600 of these local job losses came in education. These declines are accentuated by the June end and July start of the fiscal year for most states and municipalities. The public sector lost 39,000 jobs in June with the federal government making a larger contribution than in recent months, reducing payrolls by 14,000. State and local governments have been shedding jobs for over 2 years.
Productivity in the first quarter of 2011 continued its increase. For the lived experience of American households, and consumption strength, we continue to see productivity rising more rapidly than hours worked. The good news is that Americans are working harder and producing more per hour. The more troubling news is that this is restraining the pace of new hiring. Our success at doing more with less has contributed to profit rebound and helped the economy. It has also allowed more profit and production rebound despite one of the most anemic employment recoveries in American economic history.
Compensation is rising, but less rapidly than prices. The BLS reported consumer price increases across 1Q2011 of 5.3% and compensation increases of 2.5%. It appears that the large pool of unemployed is having a depressive impact on wages. Once again, real wages are under pressures as increases in compensation remain below increases in the cost of goods and services. In June 2011 average hours and wages declined slightly.
We see restrained job and wage growth as contributing to widespread displeasure with the economy in polling and other general sentiment indicators. We are moving closer to the jobs market as it will inform perceptions of the economy in the primaries and eventual general election cycle 2012. Monthly jobs numbers are now economically and politically influential.
Follow Max Fraad Wolff on Twitter: www.twitter.com/MaxfWolff
Jeff Madrick: Impact of Job Numbers Goes Far Beyond the Jobless
Something is off here.
Either the number or date is wrong, or does not subtract jobs lost or downward revisions or something.
If June was 18,000, May was 54,000, then April had 473,000?
Seems like I would have remembered that.
The Republicans are laughing because more Americans are suffering and becoming paupers. They are ardently working to create a dire situation for us all thinking that we will elect them to fix the problems that they are creating.
We all know of their support for the outsourcing of our jobs to other countries and now they are insisting in cutting all the budgets in every state and at the federal level to suck a big chunk of the money out of the economy. http://shortlink.ca/18o
Fiscal policy for the rich. Social policy for the conservatives.
And, then he announced that he would not accept the nomination of his party, and would not run for reelection for a 2nd term as our President.
Today, we are NOT winning two wars, and the economy is in even worse shape than in shambles.
During the Sen. McCarthy hearing, Joseph Welch asked of po' ol' Senator Joe:
"You've done enough. Have you no sense of decency, sir? At long last, have you left no sense of decency?"
That question can - economically, ethically, democratically, and legally - now be asked of Barack Obama.
And, IF this President has any sense of decency left, he should do LBJ one better - he should admit his abject failure as President, and do what Richard Nixon did - resign.