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When Payrolls and Unemployment Just Meet Estimates

If you were paying much attention to the financial media over the past week or so, you would think that the Federal Reserve’s decision on interest rates and every other financial decision was going to be based on the July unemployment and payrolls report. It turns out that the U.S. Department of Labor’s employment situation report came and went, with the numbers almost dead on with estimates.

Friday’s Labor Department report showed that total nonfarm payrolls grew by 215,000 in July. The official unemployment rate was left unchanged at 5.3%. Private sector payrolls grew by 210,000. These compare to the following consensus estimates from Bloomberg: Unemployment flat at 5.3%, nonfarm payrolls 212,000 for July (versus 223,000 from June) and private sector payrolls 210,000 (223,000 from June).

The main categories of jobs contributing to higher payrolls were seen in retail trade, health care, professional and technical services, and in financial activities.

June’s payrolls report was revised to 231,000 (from 223,000) and May’s payrolls were revised to 260,000 (from 254,000).

Also noted were the age, sex and ethnicity in the unemployment report:

  • Teenagers declined to 16.2% in July.
  • Adult men were at 4.8%.
  • Adult women were at 4.9%.
  • Whites were at 4.6%.
  • Blacks were at 9.1%.
  • Asians were at 4.0%.
  • Hispanics were at 6.8%.

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The number of long-term unemployed (27 weeks or more) was little changed at 2.2 million in July, and they accounted for 26.9% of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 986,000.

Also shown in the report was the so-called labor force participation rate, and it remains dismal: unchanged at 62.6% in July, after declining by 0.3 percentage point in June. The employment-population ratio, at 59.3%, was also unchanged in July.

Two last views were in the part-time effect and in the marginally attached workers. The number of persons employed part time for economic reasons was little changed in July at 6.3 million. In July, 1.9 million persons were marginally attached to the labor force, down by 251,000 from a year earlier.

By Jon C. Ogg