June Payrolls totaled 80k, 20k less than expected and well below the ADP whisper. The two prior months were revised down by a net 1k. The private sector added 84k jobs (13k from goods producing, 71k from services) vs expectations of a gain of 106k. The unemployment rate held steady at 8.2% as the 128k increase in the household survey was basically offset by the 156k increase in the size of the labor force. The all in U6 rate rose .1% to 14.9%. Two positives within the report were the .1 uptick in the Avg workweek and the .3% gain m/o/m in avg hourly earnings which comes to 2% y/o/y. The participation rate remained unchanged at 63.8% but the avg duration of unemployment ticked up to 39.9 from 39.7. Bottom line, the 3rd straight month of job growth below 100k is pathetic with an average of 78k in that time. The weakness in April and May were likely due to some weather give back from strength over the winter but June is more likely being negatively influenced from the growing global economic moderation that will likely intensify in the 2nd half, thus furthering the malaise in the labor market. While a figure like today will only invite more FOMC deliberations, if only cheap money was the magic elixir to what ails us, the global economy would be roaring. Deleveraging however is the only real, long lasting cure.

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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Payroll growth pathetic”

  1. Hugh says:

    A good summary with no punches pulled.

    I am becoming more and more persuaded by the ECRI/Husmann thesis that we are now entering a recession.

  2. Conan says:

    As Barry is talking about Long Cycles this effects employment also.. Sadly looking at U6 and Participation numbers, we are in a very major readjustment of labor waiting for the next Up or Bull Cycle…I say this is SAD as for the folks who ae unemployed for a year or more and there are many, this is life shattering as many will never recover…or at best best set back to start over from almost zero.. Thus the older the person is the more tragic the scenario…

  3. NoKidding says:

    I like the content, but: “growing global economic moderation that will likely intensify”

    How about “slowdown”, “recession”, “downturn”, or any of the other concise one-worders.

    Is it possible to be intensely moderate?
    Obstinately flexible?
    Resolutely indecisive?
    Fearlessly scared?
    Bluntly nuanced?

    ~~~

    BR: I thought the word “Pathetic” in the headline obliterated whatever nuance there was . . .

  4. Dima says:

    Pathetic is the perfect word to describe job growth.

    Pathetic is also the perfect word to describe the state of leadership in governments and major financial institutions across the world.

  5. Winston Munn says:

    Deleveraging is not a magic elixir, either. Using leverage on positive economic propositions increases a country’s wealth. Blanket austerity smothers growth.

    The recommendation has always been to “save for a rainy day”. Here is the pertinent news: it is raining.

  6. carleric says:

    And economic policy makers and our everloving Fed think spending and leveraging up debt are the only solutions. They just don’t get it.

  7. willid3 says:

    if we are in a De-leveraging period (and I suspect we are) then nothing can be done to recover the economy with politicians we have (one party can’t see any reason to help out the economy , the other can’t push things through on their own) . as the 99% accommodate their down ward spiral (which has been going on for a decade now), there can be no real recovery. problem is they are also 70% of the economy (or more. business spending doesn’t exist without some one buying what they sell. ever). and with government spending shrinking. and taking businesses customers with them (while some might argue that they truly dont have jobs. they do truly spend money at a business near you. without their jobs, and their spending, you wont have one long either). welcome to the world where the lack of jobs has finally taken down the economy. we started on this path a decade ago.

  8. ezrasfund says:

    People should Floyd Norris’s column on this subject. He picks up one of Barry’s favorite themes, which is that these numbers are seasonally adjusted, with the adjustment (about -700,000 in summer) overwhelming the actual figure. In fact on an unadjusted basis over 800,000 jobs were added. Norris posits that because business are now trying to stay leaner the seasonal adjustments are should be much smaller in summer and winter. This is definitely worth a read, as it has an interesting prediction on the pre-election numbers.

    http://economix.blogs.nytimes.com/2012/07/06/another-seasonally-adjusted-slowdown/?hp

  9. SecondLook says:

    A heretical proposition:

    The “healthy” economic baseline that virtually everyone uses in the US, economists, politicians, and the public on a more intuitive basis, is what prevailed, long term, over the period from about 1950 to 2000: 3-3.5% real GDP growth; unemployment around 5.5-6%.

    Simply, what if that is no longer the case? What if the new reality is GDP long term average growth rate of 2-2.5%, and unemployment averaging around 7-7.5%?

    The brief case for the latter:

    1. Much higher energy prices are certain to both persist and only increase over time.

    2. Demographics: An aging population, along with steady decline in net population growth.

    3. The increasing pace of economic globalization; affecting everything from balance of trades, to job creation, to wages, to being more vulnerable to external events.

    4. The end of the low hanging fruit: From commodities to increasing productivity, we’ve used up, picked over, the cheap and easy things to exploit and improve. Also known as the law of diminishing returns.

    5. What seems to be evolving is a decline in the societal notion of consumerism. You see it more and more among younger folk – not just that they can’t afford to spend like their parents did, but that they don’t really want to.

    Just something to think about over weekend…

  10. SecondLook says:

    A quick thought:

    What if the fundamental baseline assumption about the US economy: Long term average real GDP growth between 3-3.5%, unemployment between 5-6% , is no longer valid?

    A combination of multiple factors: A population both aging and declining in growth rate, High energy prices that will continue to rise over the years. Globalization with its affect on everything from trade balances, to job creation, to wages, to heightened economic sensitivity to external events. The low fruit syndrome – we’ve picked all the easy and cheap to get resources; we done all the easy increases in productivity. A societal shift about consumption, which seems to be growing among younger folk.

    The above could make for a new economic reality: GDP averaging about 2-2.5%, unemployment resting in the 7-8% range. Not quite a steady state economy, but an environment that would require us rethink a whole host of things, demand adjustments, socially, economically, and politically.

    More directly to the point about unemployment, Below is a table of 10 year averages of unemployment, starting with the 1952-1961.

    1952-1961: 4.87%
    1962-1971: 4.64%
    1972-1981: 6.6%
    1982-1991: 7.04%
    1992-2001: 5.38%
    2002-2011: 6.52%

    It might be surprising that the worst ten year period for employment was in the 1980′s – it took 5 years after unemployment peaked in 1982 at 9.7% to go below 7%.

    One other pair of figures: The average unemployment rate over the whole 60 year period, the first 30, and last 30 years.

    1952-2011: 5.84%
    1952-1981: 5.34%
    1982-2011: 6.34%

    Going with what I wrote earlier, I’ll make a prediction (one that I’m unlikely to be around to boast or apologize).

    2012-2041: 7.34% average unemployment.

  11. SecondLook says:

    Ah, I see my first post finally came on – so the second one is just a little statistics oriented. Agree, disagree, or whatever…