Nonfarm Payrolls Trending Up or Down Depending Who You Ask

According to the Bureau of Labor Statistics, nonfarm payroll employment continued to trend up (92,000) in July, and the unemployment rate (4.6 percent) was essentially unchanged. Employment grew in several service-providing industries. Average hourly earnings rose by 6 cents, or 0.3 percent.

Their version of “trending up” clearly means that it continues to be positive. At least, as far as they can tell. The 92,000 increase in July is below the 136,000 average this year, which is below the 186,000 average last year. Some would call that trending down.

On the other hand, the number of jobs assumed into existence by the birth/death model was just 26,000 compared to a 2007 average of 110,000 - so based solely on the numbers reported to the BLS this report was actually stronger than others we have seen. Whether the overall report is stronger depends on how accurately the BLS statistical estimates compensates for data they are unable to initially collect.

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Comments

[Bruce Merri...:]

Our BLS (and DOC) data are parthetically out of touch with the real U.S. economy.

In 1982, the U.S. had 100 million jobs. Now we have 150 million jobs, an annual increase of about 2 million per year (166,000 per month on average), over this 25 year period. Also, in 1982 we had 4.6 incorporated businesses. Now we have about 30 million, and every year we generate 500,000 to 800,000 new ones. Europeans call this "The American Miracle"....it is unique in history.

Moreover, over 95% of our 30 million incorporated businesses have less than 100 employees, but these businesses now account for a rising 2/3rds of the GDP. Only about 5% of those small businesses are publicly traded, so are largely invisible. Unfortunately, our BLS Payroll data mostly come from about 1500 publicly traded large businsses. (Big businesses now account for a declining 1/3rd of the GDP). Asa result, most of the innovation, new jobs and new wealth are being created by new businesses (this is our competitive advantage in a hyper competitive global marketplace).

In 1982, household American wealth was about $3 trillion. Now it is $56 trillion (up 95%), and is rising another $3 trillion every year. Household savings when properly calculated to include all investments in IRA's 401K's. money market funds, home equity etc., are $5.3 trillion, instead of zero as currently reported.

It would be nice if our Government metrics could one day catch up with the historically unprecedented real facts, in this most remarkable period in economic history....

Bruce Merrifield

2007 Aug 04 11:20 AM

[gordon:]

That all sounds rosey! Forget consumer debt? If economic growth depends on debt/leverage, this indicates we are already in a recession or close to it. www.financialsense.com...

2007 Aug 04 11:32 PM