Inside the BLS Employment Situation Report

This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which includes the 12th of the month.

Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.

– Nominal Nonfarm jobs was +292,000 (E). Revisions to the two previous months added 50,000 making the total increase since the last report 342,000.

– the size of the civilian noninstitutional adult population increased by 189,000 to 251,936,000 (H).

– 485,000 more people were in the labor force last month. These are people who are now working or, at least, state that they are looking for jobs (H)

With a labor participation rate of 62.6% 118,300 more jobs were necessary to keep pace with population growth. With the adjustments for the previous 2 months we had 223,700 more population-adjusted jobs added than that. (H) The Employment/Population increased to 59.5%

The Labor Participation Rate rose from 62.5% to 62.6%. It was 62.7% a year ago. It peaked at 67.3% in April 2000.

– Nominal job growth last month was 342,000. This accounts for the changes for the 2 previous months.
– the Unemployment Rate was flat at 5.0%. It was 5.6% a year ago.(B)
– Average hourly earnings was $25.24 down from the previous month’s $25.25. (E)
– Average work week was flat at 34.5. (E)
– Private jobs were +275,000 (without adjustments for previous 2 months). Government jobs were +17,000. (E).

– Good producing jobs were +45,000. The two previous months were revised to +39,000 and +34,000 (E)
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) rose from 62.5% to 62.6%. It was 62.7% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention. It is this 62.5% of the adult noninstitutionalized population who get pay checks and contribute to GDP.
Last month BLS measured 4 sets of people entering or leaving the jobs market:
– Job losers and persons who completed temporary jobs was 3,796,000 down 77,000 from previous month’s Job Losers and down 534,000 year-on-year. (H)

– Job leavers was 821,000. This includes anyone who retired or voluntarily left working. This is up 21,000 from previous month and down 25,000 year-on-year. (H)

-Reentrants was 2,476,000. Reentrants are previously employed people who were looking for a job and found one. This was +27,000 from the previous month and -203,000 year-on-year.(H)

-New entrants were 858,000. These are people who never worked before and who are entering the labor force for the first time. This was +11,000 from previous month and -108,000 year-on-year.

One line in the BLS Report is termed “people employed part-time for economic reasons.” These are people who want to work full time but their employer, for whatever reason, decide to employ them only part-time. In this month’s report there were 63,000 fewer people working part-time for economic reasons.
The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 342,000 more people are working.

– 485,000 fewer people are in the civilian labor force.

Largest gains were in construction and health care and health services and Leisure/Hospitality.

Employment in professional and business services increased by 73,000 in December

Construction gained 45,000 in December

Health care employment rose by 39,000 in December

Food services and drinking places added 37,000 jobs in December.
Employment in transportation and warehousing rose by 23,000 in December

Within the information industry, motion pictures and sound recording added 15,000 in December

Employment in mining lost 8,000 in December.

Manufacturing employment changed little in December. In 2015, manufacturing employment was little changed
(+30,000), following strong growth in 2014 (+215,000).

This report is good largely by comparison with the previous weak report. Reports are looks at what happened in the past with the idea that they can tell use something about what will happen in the near future. The question here is whether the concerns which have lead to large equity sell-off this week translate into businesses being less willing to hire in the near future.

The strange data in the previous Household Report which had showed that the jobs gain of people aged 45 and above exceeded the total jobs gain dissipated in this report.