To better understand the July Jobs report, one has to understand the seasonal adjustments that the Bureau of Labor Statistics employs.
Nonfarm payroll jobs added in July on a seasonally adjusted basis were +255,000 in July. But the raw or NON seasonally adjusted numbers were -1,030,000 jobs. Or 1.03 million jobs lost.
Notice in the above chart that you get big downward dips in the nonfarm payroll numbers in January and July. And it repeats every year. For January, this is the release of seasonal employment for the holidays. For July, this is the transformation to summertime employment, mostly for teachers. Local government education NSA fell by -1,093,000 in July. Total PRIVATE jobs added amounted to +85,000.
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So, the BLS smoothes the data using Seasonal Adjustments since January temporary workers being terminated or teachers not working during the summer is hardly newsworthy or surprising.
Food and drinking services actually fell by -35,000 jobs added. Bartender blues.
The bottom line is that the July jobs report was all about teachers going on summer break and low wage jobs being added. But 2016 saw an unusual seasonal adjustment upwards in the data. Here are the seasonal adjustment factors for 2016.
But for teachers, its the Summertime Blues (without a pay check).
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