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Year-Over-Year Jobless Growth Falls to Zero

by: Tim Iacono July 04, 2008    

Tim Iacono

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Annual job growth fell to 0.0 percent, its lowest level since November of 2003, as the Department of Labor reported the U.S. economy shed 62,000 jobs in June and the unemployment rate held steady at 5.5 percent.

Downward revisions were applied to data for previous months, the original April estimate of -28,000 revised to -67,000 and the May tally of -49,000 adjusted to -62,000. So far this year, nonfarm payrolls have declined by 438,000, most of the declines coming in construction and manufacturing.

For the month of June, job loss was most severe in the professional and business services category which fell 51,000 (mostly temporary help - not a good indication for future economic activity), followed closely by construction and manufacturing, down 43,000 and 33,000, respectively.

Gains occurred in the usual places - health care (up 15,000), education services (up 15,000), accommodation and food service (up 21,000), and government (up 29,000).

It seems likely that the accommodation and food service area will begin to experience job losses in the months ahead given that people are traveling and eating out less as evidenced by lower miles driven and the announcement earlier in the week of store closures and layoffs at Starbucks.

This category is also likely to be revised downward when the birth/death model data is revised - so far in 2008, more than 300,000 jobs have been added to this category through the birth/death model (on a "not seasonally adjusted" basis).

In related news, first time claims for unemployment insurance rose 16,000 to 404,000, the second time in recent months that jobless claims have risen above the psychologically important 400,000 level.

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This article has 3 comments:

  •  
    Jul 04 04:25 AM
    on the BLS website, where is the birth/death model data ?
    can anyone help please?
    Reply
  •  
    Jul 04 09:16 AM
    As said before, temp help/business help is down because efficiency is up so much. At annual grocery show, all grocers reported a great 2nd Q (e.g., Kroger up 15%). Less trips; more efficiency in checkouts-reorders-spa... planning; buying more than basics. Ditto for McDonalds (not taking the extra stop at Starbucks), Dollar Tree, Dollar General, Big Lots. And they big guy, Wal-Mart.

    Also consumer saving tons through Internet: pay bills on line; no envelopes, 42 stamps, late charges (pay minimum immediately; record clear on it), checks, trip to PO, etc. File taxes on line; pay tolls via EZ Pass; search on line.

    Products: iPhone--4 in 1. Was going to Garmin for maps; whoops, iPhone has it; saved 3 garmins (less employment at BBY and Garmin, and the trip to BBY); no new laptops--use iPhone; no watch. Cheap at $20 extra per month.

    Paper: gone paperless finally, by and large. 4 bags to recycle per week have become one every other week. PDFs other online things prevent need for all that.

    Systems simplifying--simple email orders or faxes; no more expensive EDI. And on and on it goes.

    Warp speed efficiency improvements. More to come. That's the story about employment, not to speak of angry salarymen who make employers shudder (hey, the angry salarymen may be right; but what employer needs it--so they make do).
    Reply
  •  
    Jul 04 12:47 PM
    There are 111 million American households. Sales data on a number of so-called productivity gadgets (i-phones, garmin), show less than a 5% or 10% penetration of these HHs, and even when the total sales exceed 5 million units cummulatively over years, much is just due to techno-geeks simply replacing older units, and thus penetration progress is slowed..

    I don’t think even Apple or the WSJ analysts tracking AAPL stock see those phones at current price points ever impacting the data representing 111 million households. I'd like to see the usage numbers on actual internet banking for 2007 as well, I know the techno-geeks love these rosy projections for "future usage"...but let’s look at what’s really happening today.

    Back to BLS...the incredible job growth numbers spewing just from the birth-death model alone is a bigger joke than the ‘hedonic adjustments’ used in GDP data.
    America gov't lies to the American public & biz community via statistics. What else is new?
    Fortunately, many firms do their own analysis rather than be misled into the poorhouse by bogus 'feel-good' gov't ‘miss-info-stats’.

    Grocery sales are up as much due to price inflation as anything else. Our local biggest chain also sales gas and admitted that accounted for a chunk of revenue growth.
    Reply
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