This post is an excerpt from the updated permanent Employment Charts page, which is updated regularly when new data becomes available. It also includes data on Unemployment Claims, Job Openings, and Federal Withholding Tax. You can bookmark that page for ready reference.
Total and Full Time Employment
Updated July 6, 2012 The number of persons employed full time in June rose by 1,390,000, not seasonally manipulated (from the household survey). That compares with a gain of 637,000 in June 2011. The average gain in June for the previous 10 years was 1,382,000.
The gain in June was the largest in 6 years. Taking the 3 months from April through June, this year’s gain of 2.11 million was similar to 2011′s gain of 2.07 million but was below the prior 10 year average of 2.8 million, and well below the bungee rebound of 4.0 million in 2010. These numbers represent a modest but steady recovery, wholly consistent with the trend of the past 2 years and much better than the “sky is falling” headline seasonally adjusted numbers that everyone was moaning and groaning about on Friday.
Any time you see that much hysteria over a single data point, it’s usually a good idea to be highly skeptical. Not that any of this has anything to do with stock prices. They may continue lower, but the employment data is not the reason. Fear of the unknown is. My focus is on full time rather than total employment. Part time jobs are nice, and for many that hold them, they are a lifeline, but the important metric here is full time jobs. Without those, we’re dead. Full time employment grew far more than total jobs (corrected) in June. A huge number of workers moved from part time to full time employment.
The chart above gives some perspective on how far total employment and full time employment fell in the first stage of this depression, and how much they have yet to recover. The seasonally adjusted (SA) fiction is once again really screwing the pooch this month.
Seasonally adjusted numbers frequently veer away from reality by the very nature of the arbitrary seasonal adjustment process. Conomists and the media focus almost entirely on this nonsense, which attempts to compare one fictitious number with another fictitious number to derive a fictitious month to month change. Meanwhile they ignore the actual data.
If they’re going to emphasize the seasonally adjusted fictional data, they could at least check it against the trend of the real data. The not seasonally adjusted (NSA) data is the actual data. The seasonally adjusted data is absolute fiction, and it frequently over or understates the real rate of change of the trend, and sometimes even goes in the opposite direction of the actual momentum of the trend. The conomic establishment tries to downplay the actual data by calling it “not” data as in “not seasonally adjusted,” which carries the connotation that somehow “seasonally adjusted” (SA) without the “not” in front of it is the real thing, when the opposite is true.
Mainstream Wall Street and academic shill conomists cloud and obfuscate the facts by sticking them into a numbers grinder hoping the product will come out as a nice tasting numbers sausage that everyone can eat. Unfortunately, sausage, while tasty, isn’t good for you when it’s your entire diet. And if you actually knew what you were eating, you wouldn’t eat it.
Wall Street and the shillcademic conomists are too lazy or too crooked to do the simple analysis of comparing year to year changes and the monthly rate of change in the real data to past years to get a clear picture of where the trend is headed. It’s so easy to do when the data is placed on a chart. But unlike technical analysts who actually know how to read patterns and trends in noisy data, the vast majority of mainstream conomists who sell their souls just to get on TV, have no clue how to to do that. The process is so simple. Maybe that’s the problem. They like complication because they think it puts the truth out of reach of the general public. In reality, the public gets it. It’s the conomists who don’t.
This charts shows the year to year trend line connecting the June data in both series along with the raw actual NSA data, and the SA fiction. Contrary to all the hand wringing over the jobs data, where the seasonally finagled data shows the trend slowing, the actual data shows clearly that the trend is not slowing.
July is usually the peak month for both total and full time employment. Here we are in June, and this year the numbers are already substantially ahead of last July. In fact, it broke last July’s level in April. The economy was a couple months ahead of schedule in affirming the uptrend in jobs and the trend is accelerating.
Friday’s jobs report was not the disaster that the pundits, the media, and the trading bot Al Gore rhythms seem to believe. Furthermore, the withholding tax data suggests that something is gaining, whether it is average compensation or jobs or both.
Stock market performance is at the mercy of the Fed (0r over the past 12 months the ECB, not shown), and employment typically follows them both. While at times there’s a lag, the linkage is undeniable. However, over the past year, the SOMA has not reflected the impact of the Fed’s MBS purchases from the Primary Dealers, a subject which I cover in depth weekly in the Fed Reports. That graph of Fed purchases from the Primary Dealers has been rising steadily since last September. By cashing out the dealers via these MBS buys, the Fed enables the dealers to buy more Treasuries. The next week, the Treasury spends that cash. That’s how Treasury debt is immediately transformed into economic activity.
We all know that it’s fake activity and can only be sustained as long as the Treasury Ponzi remains intact, but the fact is that it does remain intact, and it’s resulting in steady gains in employment, including full time employment over the past year. The game should continue until the Fed picks up the marbles, or until the other players run out of chips, which probably won’t happen as long as everyone is running away from the European gaming tables to play at the US casino.
Average Weekly Earnings
Updated July 6, 2012
Average weekly earnings growth returned to trend in June. After a strong gain in April, average weekly earnings collapsed in May. Year to year, the gain in average weekly earnings was 2.2%. Hourly workers did not do so well, as the year to year gain in average hourly earnings was just 1.1%. Salaried and commissioned workers did better.
While hourly wages were previously stagnating, they had been rising lately, with the average hourly wage up 2.7% in the 12 months through April. The past 2 months have seen a severe slowing in those gains as the number of full time workers has surged.
Hours worked were up slightly from 34.4 in June 2011 to 34.5 last month. So more people were working in June with slightly more hours and an overall 2.2% increase in average weekly earnings. Excess labor supply is slowly being absorbed. Unfortunately, labor supply absorption is too slow to result in any overall improvement in the real unemployment rate, which is likely to remain stuck for the foreseeable future around 15% including discouraged and under employed part time workers wanting full time work.
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