Non-Farm Payroll Report: A Goose Egg... Literally

by: Karl Denninger

Well now that isn't good....

Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.

While we didn't print "negative" according to the Establishment survey, that's a cooked number full of estimates and games (like the "Birth-Death" model.) The alleged unemployment rate didn't change, so they claim.

But hours worked edged down as did compensation. So how did we spend more last month? We're charging it - again. This is not good, it's very bad.

There's no good news in this data at all.

On the household survey total employed fell by 49,000, while we added 200,000 people to the population. We needed 200,000 new jobs just to absorb the working age population increase and instead we lost 49,000.

So in point of fact, adjusted for workforce population change, we printed a negative 250,000!

Job growth? Where? Basically nothing on the annualized basis, and on the zero line monthly. Meh.

The "Not In Labor Force" number declined slightly - that is, more people tried to come back into the workforce last month. They failed.

Note the little "hook" here - the total number of employed people actually declined, as noted above. Leave the so-called "black box" nonsense out of it - this is raw household data, no adjustments.

This is the rate of the change data; notice that it has not gone positive - not once - since 2007. This is the key indicator on a composite basis as it depicts the rate of change in this:

And that, my friends, is the entire story when it comes to tax policy. Without repairing the employment rate, which cannot happen until we solve tax and trade policy, the government cannot collect tax revenue.

All the blathering on TV today, and you're going to hear a lot of it, is immaterial until and unless that last chart is addressed. We cannot solve the problems our nation faces economically so long as we do things that damage that chart. And that chart, my friends, has been in decline for ten years, not two or three.