August 2011 Employment Report

Click image for larger view

The markets were stunned when the Bureau of Labor Statistics (BLS) reported results from its business establishment survey that showed no net growth among nonfarm jobs in the U.S. economy during August. That outcome has occurred only one other time -- in February 1945 -- since 1939 when the Labor Department began compiling data. Moreover, the change in total nonfarm payroll employment for June was revised from +46,000 to just +20,000 (nearly back to the initial June estimate) while the change for July was revised from +117,000 to +85,000. By contrast, because the BLS’s household survey showed a stronger gain in jobs, the unemployment rate remained at 9.1 percent.
 

Click image for larger view

Click image for larger view

Click image for larger view

One positive piece of news was that both part-time and full-time employment increased in August (respectively, by 430,000 and 471,000 jobs).
 

Click image for larger view

The civilian labor force participation rate ticked higher -- to 64.0 percent from 63.9 percent (a 27-year low) -- but the annual percentage increase in average hourly earnings of production and non-supervisory employees dropped by nearly 0.4 percentage point, to below 1.8 percent; with the consumer price index for urban consumers rising at a 3.6 percent annual pace, wages are falling in real terms (i.e., wage increases are not keeping up with price inflation).