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Employment Situation: Solid Gains As 3-Month Avgerage Payroll Growth Nears 200k

August 4, 2017

Bottom Line: Payroll Employment rose by 209k in July, compared with market expectations for an increase of 180k. Over the last 3 months the retail sector rebounded from significant job losses. That has helped bring the 3-month average total payroll growth to 195k, above the 6- and 12-month averages, suggesting the labor market remains strong. However, as we look forward we'll be watching those retail figures closely as the net hiring in retail vs. online reached a level where it has topped in recent years. The unemployment rate fell, as household employment grew while labor force participation rose less than those gain. Both hourly and weekly earnings rose modestly,improving the trend to 2.8% annualized average hourly earning growth over the last 3 months.

Payroll Employment rose by 209k in July, compared with market expectations for an increase of 180k. The prior 2 months were revised, higher in June by 9k and lower in May by 7k.

Government jobs ROSE by 4k. Consequently, private sector jobs ROSE by 205k. Private education jobs rose by 10k. S

Overall employment is now 1.5% ABOVE its year ago level, Over the past 12 months, 2,158k jobs have been created. In July, the job gains were in:

  • Trade, Transportation & Utilities (+16k with -9k of those in Retail Trade)
  • Professional & Business Services (+49k with the addition of 15k in Temp Help Services)
  • Leisure & Hospitality (+62k)
  • Education & Health Services (+45k)
  • Manufacturing (+16k)
  • Construction (+6k)
  • Information (+4k)
  • Jobs were shed in Financial Activities (-1k)

The Unemployment Rate FELL by 0.1 percentage points in July to 4.3%, compared with market expectations for a small decline to 4.3%. Household employment rose by 345k while the labor force increased by 349k, resulting in an increase in the number of unemployed of 4k.

The Labor Force Participation Rate ROSE by 0.1 percentage points to 62.9%. The Employment-Population Ratio ROSE by 0.1 percentage points to 60.2%.

  • The number of people Working Part-Time for Economic Reasons FELL by 51k to 5,231k. while Long-Term Unemployment ROSE by 121k to 1,785k (accounting for 25.6% of the unemployed), while the Mean Duration of Unemployment ROSE by 0.2 weeks to 24.9 weeks.
    There are now 7.0 million people officially unemployed. In addition, there are another 5,420k people who say they want a job but are not currently looking for one. Finally, another 5,231k people are working part-time because of slack economic conditions.

The Index of Aggregate Hours ROSE by 0.2%, combining the modest gain in private payroll employment and the steady workweek.

Hourly Earnings ROSE by 0.3% in July, above market expectations of 0.3%. Hourly earnings are now 1.7% ABOVE their year ago level.

Weekly Earnings also ROSE by 0.3%, the result of the change in hourly earnings and a steady workweek. Weekly earnings are now 2.8% ABOVE their year ago level.

The Average Workweek was UNCHANGED at 34.5 hours, in line the market consensus at 34.5 hours.

Article by Contingent Macro Advisors