I’m Calling BS on the Second Straight Amazing Jobs Report, Understanding Why

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by Mish Shedlock, Mish Talk:

The economy added a much higher than expected 528,000. This follows a much higher than expected 372,000 jobs in June. But the discrepancy between jobs and employment is amazing.

BLS Jobs Statistics at a Glance

Total nonfarm payroll employment rose by 528,000 in June, and the unemployment rate dipped 0.1 percentage points to 3.5 percent, the U.S. Bureau of Labor Statistics reported today.

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Nonfarm Payrolls vs Employment Level. Chart by Mish. One set of numbers is wrong.

Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Both total nonfarm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels.

Here are the details from the monthly BLS Employment Report.

  • Nonfarm Payroll: +372,000 to 151,980,000 – Establishment Survey
  • Civilian Non-institutional Population: +177,000 to 264,012,000
  • Civilian Labor Force: -63,000 to 163,960,000 – Household Survey
  • Participation Rate: -0.1 to 62.1% – Household Survey
  • Employment: +179,000 to 158,290,000 Household Survey
  • Unemployment: -242,000 to 5,670,000- Household Survey
  • Baseline Unemployment Rate: -0.1 to 3.5% – Household Survey
  • Not in Labor Force: +239,000 to 100,051,000 – Household Survey
  • U-6 unemployment: No Change 6.7% – Household Survey

Revision Details

  • The change in total nonfarm payroll employment for May was revised up by 2,000, from+384,000 to +386,000
  • The change for June was revised up by 26,000, from +372,000 to +398,000.
  • With these revisions, employment in May and June combined is 28,000 higher than previously reported.

Economists’ Estimates

  • Nonfarm Payrolls: 250,000 expected vs 528,000 actual
  • Unemployment Rate: 3.6% expected vs 3.5% actual
  • Manufacturing Payrolls: 15,000 expected vs 30,000 actual
  • Hourly Earnings: +0.3% expected vs 0.5% actual

The above estimates from Bloomberg Econoday.

Payrolls were much stronger than expected. But there’s a continued huge divergence between jobs and employment.

Change in Nonfarm Payrolls

Change in Nonfarm Payrolls 2022-07

For the third month we see strength in lagging sectors: Leisure and hospitality, and health services.

Change in Nonfarm Payrolls Since February 2020 

Change in Nonfarm Payrolls Since February 2020 2022-07

Despite recent gains, Leisure and hospitality employment is 1.2 million lower than in February 2020.

Part-Time Jobs

The above numbers never total correctly. I list them as reported.

However, it’s worth noting that for the second month full-time employment has declined.

In March, the BLS said full-time employment was 132,718,000. Today it says 132,577,00. Again we see huge divergences between the two reports.

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