Introduction
Earlier this morning, the Labor Department released employment data covering July. Based on the report, the unemployment rate fell 0.1%, to 5.5%. Meanwhile, payroll employment expanded by a paltry 32,000 jobs.
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In today's employment release from the Labor Department, reported results for the unemployment were better than the consensus forecast, which had predicted no change. However, results for payroll employment were far, far below the consensus forecast, which was looking for a gain of about 250,000 jobs.
The two components comprising each month's employment report are the household survey and the payroll survey. The unemployment rate is derived from the former, making it a visible, highly sensitive number for political purposes. The payroll survey represents the number generally more important to the behavior of the financial markets, but it certainly possesses political importance, too. The report today indicated an increase of 32,000 jobs during July. This compared with a decline of 45,000 in payroll employment during July of 2003.
Today's report included downward revisions to both June and May payroll data, to +78,000 from +112,000, and to +208,000 from +235,000. Therefore, including revisions, payroll employment over the last three months grew by a net of 318,000 jobs, compared to the 379,000 gain before the June and May adjustments. (During the same three-month period in 2003, payroll employment contracted by 87,000.)
The following table puts into perspective the reported growth in payroll employment over the trailing three months, versus the comparable period during the prior five years.
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TRAILING THREE-MONTH PAYROLL EMPLOY-
MENT GROWTH (Thousands of Workers)
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Mo. 2004 2003 2002 2001 2000 1999
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July 32 -45 -111 -115 160 295
June 78 -14 25 -150 -25 257
May 208 -28 2 1 231 214
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Tot. 318 -87 -84 -264 366 766
=== == == === === ===
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For 2004 to date, payroll employment has grown by a reported 1,237,000 jobs. This compares with a decline of 282,000 jobs during the first seven months of 2003.
According to today's report, average hourly earnings rose five cents in July, to $15.70. This represented a gain of approximately 0.3% from June's $15.65, which was unrevised from last month's report. Year over year, average hourly earnings were up 1.9%.
The table below contains the latest available results for key employment and inflation series. (NOTE: The new material contained in these tables will be posted to the "Data & Charts" section of the GRA website.)
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KEY U.S. EMPLOYMENT AND INFLATION DATA
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PAYROLL
UNEMPLOYMENT EMPLOYMENT AVERAGE HOURLY
RATE CHANGE EARNINGS
(%) (000s) ($s)
--------------- ---------- -----------------
Month Yr. Yr. Yr. Year/
/Year No. Ago No. Ago No. Ago Year
--------------- ---------- ------------------
07/04 5.5 6.2 +32 -45 15.70 15.40 1.9%
06/04 5.6 6.3 +78 -14 15.65 15.34 2.0%
05/04 5.6 6.1 +208 -28 15.63 15.31 2.1%
04/04 5.6 6.0 +346 -20 15.59 15.25 2.2%
03/04 5.7 5.8 +353 -110 15.55 15.27 1.8%
02/04 5.6 5.9 +83 -159 15.52 15.27 1.6%
01/04 5.6 5.8 +159 +94 15.49 15.18 2.0%
12/03 5.7 6.0 +8 -209 15.45 15.18 1.8%
11/03 5.9 5.9 +83 -37 15.46 15.13 2.2%
10/03 6.0 5.7 +88 +83 15.43 15.10 2.2%
09/03 6.1 5.7 +67 -47 15.41 15.05 2.4%
08/03 6.1 5.7 -25 +11 15.41 15.00 2.7%
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EMPLOY. COST INDEX (%)* PRODUCTIVITY (%)#
----------------------- ------------------------
Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr.
----------------------- ------------------------
2004 1.1 0.9 <======> 3.8 <================>
2003 1.2 0.9 1.0 0.8 3.4 6.2 9.5 2.5 4.4
2002 0.9 1.0 0.8 0.9 9.8 0.7 4.5 2.3 5.0
2001 1.1 1.0 1.0 1.0 -0.1 3.1 1.6 7.0 2.1
2000 1.2 1.0 0.9 0.9 -1.7 7.5 -0.4 3.3 2.8
1999 0.4 1.1 0.9 1.1 2.7 0.6 3.0 6.5 2.8
1998 0.7 0.8 1.0 0.7 3.0 1.3 3.0 4.0 2.6
1997 0.7 0.8 0.8 1.0 -1.2 4.0 4.2 0.9 1.7
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CONSUMER PRICE INDEX## PRODUCER PRICE INDEX@
-------------------------- ---------------------
Month Yr. Year/ Yr. Year/
/Year Index Ago Year Index Ago Year
-------------------------- --------------------
06/04 189.4 183.5 3.2% 148.4 142.7 4.0%
05/04 188.8 183.3 3.0% 148.8 141.9 4.9%
04/04 187.6 183.4 2.3% 147.6 142.5 3.6%
03/04 187.2 184.0 1.7% 146.6 144.6 1.4%
02/04 186.3 183.2 1.7% 145.8 142.8 2.1%
01/04 185.8 182.2 2.0% 145.7 141.1 3.3%
12/03 184.9 181.6 1.8% 144.8 139.3 3.9%
11/03 184.6 181.4 1.8% 144.5 139.7 3.4%
10/03 184.9 181.2 2.0% 144.7 140.0 3.4%
09/03 185.1 180.9 2.3% 143.8 139.0 3.5%
08/03 184.5 180.6 2.2% 143.5 138.6 3.5%
07/03 183.8 180.1 2.1% 142.8 138.6 3.0%
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NOTE: All data are seasonally adjusted. *Total
civilian compensation, 3-month change. #Nonfarm
business output per hour, annual rates. ##All
urban, all items. @Finished goods.
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