July jobs report: not good, but still positive

As expected the BLS released its July jobs report today for the month of June and the results were not very good. While the economy did add 80,000 jobs this is far below what we really need to see to get the economy really moving. In addition, the numbers for April were revised downward by 9,000 jobs and the numbers for May were revised upward by 8,000 jobs.

There was some reason to be optimistic that the numbers would have been better (still not great) because ADP had estimated that the economy had added 176,000 jobs. This is one of those times that I am sorely tempted to wonder why conservatives seem more willing to take the government’s numbers over a private company’s numbers, and hmmm, I guess mentioning that means I just gave in to that temptation.

I bring this up because of conversations I had with a conservative reader (hi Gary!) about whether we should be using Gallup’s numbers back in February when it had US unemployment at 9.2%. The argument was (ostensibly) that Gallup was more reliable because its numbers were not seasonally adjusted. For some reason those conservatives aren’t saying that anymore as Gallup now has unemployment at 8.0% instead of the 8.2% reported by the BLS. I mean, either way it’s bad, so let’s just be consistent. I’m going to continue using the BLS numbers. But just a reminder: the seasonal adjustments by the BLS always cancel out by years’ end and are intended to give a more accurate, less volatile picture, not to “cook the books” for political purposes. (In fact, the BLS seems to have subtracted 311,000 jobs to get the numbers for this month, so an unadjusted report would have shown job growth of 391,000 jobs and that would have set a completely different tone for the talking heads this morning.)

Anyway, here is the chart of what the jobs report might mean for the president’s re-election chances. As you can see, if the numbers don’t start picking up, he will be below even Nate Silver’s “optimistic” projections for his chances for victory.

I’m going to (foolishly) go out on a limb here and predict that next month’s report will be much higher. While this month’s report was certainly disappointing, the trend in job growth seems to have bottomed out, and may be starting to accelerate again. If I’m wrong (a VERY likely possibility considering my track record) I’ll eat crow next month.

Previous post about jobs report here. First in the series here. “Super Optimistic” line explained here.

Author: Wiesman

Husband, father, video game developer, liberal, and perpetual Underdog.

4 thoughts on “July jobs report: not good, but still positive”

  1. Here is some information pulled straight from the BLS report.
    Unemployment rate:
    blacks 14.4%
    adult men 7.8 %
    adult women 7.4 %
    teenagers 23.7 %
    whites 7.4 %
    Hispanics 11.0 %
    Asians was 6.3 %

    Number of long-term unemployed (jobless for 27 weeks and over) 5.4 million. These individuals accounted for 41.9 percent of the unemployed.

    2.5 million persons were marginally attached to the labor force. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

    Professional and business services added 47,000 jobs in June, with temporary
    help services accounting for 25,000 of the increase.

    Gallup offers unadjusted numbers and adjusted numbers. Although I understand how and why the BLS uses adjusted numbers (to make the politicians look good is a likely purpose), I maintain that the numbers are what they are and should not be adjusted.

    Also, I contend that the Gallup information is accurate because they consider unemployed and underemployed. Both the BLS and Gallup do not consider those people who have stopped looking for work. One additional flaw in both systems is that they give the same weight to temporary jobs as to permanent jobs. When we consider that 30% of the 84,000 new hires are temporary jobs the repost looks even bleaker.

    Here is the Gallup information for any other nerds who are interested:

    http://www.gallup.com/poll/155486/Unadjusted-Unemployment-Unchanged-June.aspx

    1. You linked to the same report I did in my post, btw.

      BLS also has numbers for underemployed as well. I consider BLS more accurate because they collect a lot more data than Gallup, which relies on a survey of 30,000 households. The BLS surveys more households, plus they survey businesses (establishments) and also use benefits claims. A lot more data.

      Either way, no matter who you ask, unemployment is WAY too high. On that we agree.

      I’d also point out that “cooking the books” is a no-win proposition at best, and potentially a losing one. You could cook the books and tell people that unemployment is 4% and it’s not going to matter. People are voting based on their feelings about their personal situation and the situations of people they know. No government or private company report is going to change that. I’m publishing these reports because, if accurate, they will give a good indication of what the president’s chances are. If they aren’t accurate, publishing cooked numbers won’t help (or hurt) him much.

      1. I like that Gallup continually collects their information while BLS collects only one week per month. While the BLS mentions underemployment I think Gallup does a more comprehensive job of including those numbers.

        In my opinion a more accurate data set would be to measure employment. Both Gallup and BLS sidestep the issues of people who have simply stopped looking for work or have moved to an unearned type of revenue such as disability. Investor’s Business Daily reports that more workers went on disability last month than were hired. Those numbers are completely ignored in the jobs formula.

        http://news.investors.com/article/617233/201207060945/disability-climbs-faster-than-jobs-under-obama.htm

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