In July, the US economy appears to have created a healthy number of jobs (+255,000). If one looked at the Current Establishment Survey (CES), the labour market appears healthy. The ‘Current Population Survey’ (CPS) paints a picture of slight deterioration in labour market health, at the margin. As per household survey, new jobs in the month of July were found only by those who either had no high school degree or had not gone to college. The unemployment rate for those who had not even completed high school dropped from 7.5% in June to 6.3% in July (seasonally adjusted). Unemployment rate for those with some college degree went up by .1% from 4.2% to 4.3%.
Among ethnicities, the unemployment rate for Asians went up by 0.3% to 3.8% in July. In the last several months (or, years) table A-7 is fodder for candidates like Bernie Sanders or Donald Trump. All labour market indicators for ‘foreign born’ are far healthier than that of ‘native born’. Given that multiple jobholders went up meaningfully by 164,000 (Table A-9), the total job creation (even from the household survey) of 420,000 is brought down to 256,000 in terms of new jobs created. Both the median and mean duration of unemployment had climbed steeply in July (Table A-12).
Table A-14 shows that the unemployment rates for workers in ‘Mining, Quarrying, Oil and Gas Extraction’, in ‘Durable Goods Manufacturing’ and ‘Information Technology’ are higher in July 2016 than they were a year ago.
From Table A-15, we note that the U-6 measure of unemployment rate had gone up marginally by 0.1% to 9.7% in July. It is still well below the rate of 10.4% in July 2015, however.
The Establishment survey paints a far healthier picture. The index of aggregate hours worked, index of aggregate payroll have expanded meaningfully in July.
‘Charting the labour market’ is a monthly chart pack put out by the Bureau of Labour Statistics. It is updated every month. For July, the chart pack was updated on August 5 and you can find it here. Charts 3, 4, 8, 12, 18 and 20 show the fragility of the labour market recovery compared to previous two recoveries which were not the strongest of the post-WWII recoveries either. BLS also publishes ‘Highlights of Current Employment Statistics’ which is a detailed Industry Employment Analysis. For July, the publication is here. Undoubtedly, the US has done better than Japan or Europe from their (non) recoveries from financial crises. But, clearly, the United States’ economic health is fragile and not sturdy.