May Jobs Report

The numbers provided by ADP

On 6/5, ADP reported that businesses added a disappointed 135,000 jobs in May versus the estimated number of 167,000 jobs by economists.

Small business added 58,000 while medium and large business added 39,000 each.

The numbers provided by government

The government reported that the economy added 175,000 jobs in May, 2013. Yet, the unemployment rate dropped to 7.6% due to the government now counts more people in the work force—420,000 more. As a result, the number of people who wanted a job but could not find one last month is 18.472 million—400,000 more than April.

Where did this 400K number come from?

Last month, the number of people not counted in labor force decreased by 69,000 and the government counted 408,000 less who were not in the labor force but wanted a job—and could not find one. These helped bringing the true number of unemployed persons down to 18,072,000 (11,659 + 6,413) in April. Is this coincidence? Or is it the way the government is playing with numbers?

Anyway, let us look at the numbers released by the Bureau of Labor Statistics (BLS) to see the real state of employment (click here to access data prepared by the BLS).

(in thousands) Jan Feb Mar April May
Civilian labor force: 155,654 155,524 155,028 155,238 155,658
Employed: 143,322 143,492 143,286 143,579 143,898
Unemployed: 12,332 12,032 11,742 11,659 11,760
Unemployment rate: 7.90% 7.70% 7.60% 7.50% 7.6
Not in Labor Force: 89,008 89,304 89,967 89,936 89,705
Not in Labor Force—
But want a job: 6,750 6,631 6,821 6,413 6,712

Numbers that stood out in this month’s report (from table A-8) is the number of people working part-time:

—the number of part-time workers due to economic reasons increased only by 26,000 from 18.908 million to about 18.934 million.

—the number of part-time workers due to economic reasons (including unable to find full-time jobs) decreased by 12,000 from 7.916 million to 7.902 million.

Hence, in May, economy gained a net of 175,000 jobs while there were only 26,000 more part-time jobs—a reverse of the trend seen for the last few months.

The good, bad and ugly news in the employment market

The good news is the economy added a net gain of 175,000 jobs—and only 26,000 part-time jobs. 

The bad news is with almost 18.5 million needing jobs, it will take over 100 months at this rate of 175,000 a month. Now, Wall Street will jump up with cheers thinking the government will continue pumping in money–helping to keep the stock market red hot.

The ugly news is the government may indeed continue to pump in money as this is the only way Obama can do to help this economy from collapsing. One way to look at this is Obama pumped in 85 billion a quarter–the money this country does not have–to create about 170K jobs a month. That is 485K per job.

Ch3 Nguyen

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