Don’t be fooled by the 223,000 increase in payroll jobs reported by the Bureau of Labor Statistics (BLS) on Thursday. The BLS also revised its estimates for April and May downward by a total of 60,000 jobs, making the net gain in payroll employment for June an anemic 163,000.
“Anemic” is also the right word for the 208,000 average monthly gain in payrolls during the first half of 2015. This is down almost 20% from the 260,000 monthly average for all of 2014.
While the BLS establishment survey numbers were anemic, the household survey figures for June would be better characterized as “horrendous.” The reported 0.2 percentage point decline in the “headline” (U-3) unemployment rate, to 5.3%, was pure fiction. Total employment actually fell. A net 432,000 working-age Americans fled the labor force during June, bringing labor force participation (LFP) down to the lowest that it has been since October 1977.
Adjusted to the LFP of December 2008, which was when the Obama team was drawing up its plans for economic recovery, the unemployment rate actually increased by 0.1 percentage point during June, to 9.8%. Think about that. After six years of economic recovery, the “true” unemployment rate is still 9.8%
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