July Jobs Report: Downward Trend Continues – AJSN 600,000 Higher, With Latent Demand Over 17.8 Million

 I saw three published estimates of the number of net new nonfarm payroll positions in this morning’s Bureau of Labor Statistics Employment Situation Summary.  All three were 175,000. 

It didn’t make it – the number was 114,000.  That’s still decent, as American population increased only 163,000, but was the worst in months. Even poorer in relation to recent outcomes was the seasonally adjusted unemployment rate, up from 4.1% to 4.3%.  Other results inferior to June’s were unadjusted joblessness at 4.5% instead of 4.3%, the number of unemployed up 400,000 to 7.2 million, the employment-population ratio from 60.1% to 60.0%, and the count of those working part-time for economic reasons, or thus far unsuccessfully seeking full-time positions while keeping shorter-hours ones, up a disturbing 400,000 to 4.6 million.  Average hourly nonfarm private payroll earnings again roughly matched inflation, up 8 cents to $35.07, and the number of long-term unemployed, those jobless for 27 weeks or longer, remained at 1.5 million.  On the good side, the number claiming no interest in work lost 804,000 for a 1.41 million drop over two months, to reach 92,972,000, and the labor force participation rate gained 0.1% to get to 62.7%.

The American Job Shortage Number or AJSN, the measure showing how many additional positions could be quickly filled if all knew they would be as easy to get as a lottery ticket, gained 602,000 as follows:

The share of the AJSN from those officially jobless was 38.7%, up from 37.7%.  Compared with a year before, the metric is almost 1.2 million higher, almost matching the difference from more unemployment but also reflecting gains in those discouraged and those wanting work but not looking for it for a year or more. 

Some jobs reports are confusing and contradictory, but this one was not.  People are still joining the labor force in large numbers, shown by the 1.41 million above and by the count of those employed actually going up, 264,000 to 162,038,000.  When you look at the discouraged and did-not search outcomes, along with the unemployment results, you can see that many Americans are either losing work or not getting it.  The labor force is growing faster than the number of positions.  Inflation is now at 2.5%, reasonable in every way except in relation to the Federal Reserve’s target, but we clearly need more jobs – especially full-time jobs.  The Fed missed a chance to cut interest rates this week; at next month’s meeting, they shouldn’t, and a nominal quarter point, unless the data above substantially improves, will not be enough.  For now, the turtle stayed right where he was.