July 2015 Employment Report

Click image for larger view

According to the Bureau of Labor Statistics’ (BLS) establishment survey, non-farm payroll employment increased by 215,000 jobs in July -- in line with expectations of 212,000. Moreover, combined May and June employment gains were boosted by 14,000 (May: +6,000; June: +8,000). Meanwhile, the unemployment rate (based upon the BLS’s household survey) was unchanged at 5.3% as both the number of persons finding work (101,000) and the change in persons not in the workforce (144,000) were fairly modest. 

Click image for larger view

Observations from the employment report include:

* The disparity in jobs gains between the establishment (+212,000) and household (101,000) surveys was less noticeable.

* The Mining & Logging category was the only “supersector” that shed workers, thanks mainly to the continued oil-sector downturn.

* Over 68% (142,900) of private-sector (210,000) job growth occurred in the sectors typically associated with the lowest-paid jobs -- Retail Trade: +35,900; Professional & Business Services: +40,000; Education & Health Services: +37,000; and Leisure & Hospitality: +30,000. This is a persistent issue, as we have repeatedly highlighted: There are 1.40 million fewer manufacturing jobs today than at the start of the Great Recession in December 2007. Nearly 1.43 million Food Services & Drinking Places (i.e., wait staff and bartender) jobs have been added during that time period, however. 

Click image for larger view

* The employment-population ratio was unchanged at 59.3% -- the level it has been at during six of the last seven months; i.e., for every five people added to the population, only three are employed. Meanwhile, the number of employment-age persons not in the labor force rose by 144,000 to a new record of almost 93.8 million. 

Click image for larger view

* The labor force participation rate (LFPR) also remained stable at 62.6%; prior to June the LFPR had not been that low since October 1977’s 62.4%. Average hourly earnings of all private employees rose by $0.05 (to $24.99), resulting in a 2.1% year-over-year increase. For all production and nonsupervisory employees (pictured above), hourly wages rose $0.03 (+1.8% YoY). With the CPI running at an official rate of 0.1% YoY, wages are technically rising in real (inflation-adjusted) terms. The average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in July. 

Click image for larger view

* Finally, full-time jobs jumped by 536,000 while part-time jobs fell by 402,000. Full-time jobs have been trending higher since December 2009, but are still 286,000 short of the pre-recession high (even while the non-institutional, working-age civilian population has risen by an estimated 17.7 million). Part-time jobs, by contrast, have been stuck in a channel between roughly 27 and 28 million.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.