Foreword
In the event I do not distribute additional material today, I will take this opportunity to wish everyone a safe, pleasant Labor Day weekend. And during the course of it, please take a few opportunities to think about and, if you are so inclined, to say a prayer or two for our brothers and sisters who have been so brutally victimized by Katrina.
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Summary
Earlier today, the Labor Department released employment data for August. The report indicated an unexpected decline in the unemployment rate to 4.9%, down 0.1% from July. Meanwhile, growth in payroll jobs for the month was reported at 169,000, versus a consensus estimate that was looking for something around 190,000.
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Today's release from the Labor Department showed that the unemployment rate in August fell 0.1%, to 4.9%. The report also indicated an expansion in payroll employment of 169,000 jobs during the month, lower than a consensus forecast that was looking for an increase of around 190.000. However, there were upward revisions to June and July data. When these revisions are taken into account, they more than compensate for August's shortfall versus expectations, when viewing results on a trailing three-month basis.
The survey dates used in compiling today's release are such that reported results are unaffected by any impact from Hurricane Katrina.
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. Thus, you can be sure that on a Labor Day weekend, members of the Bush Administration will be pointing to a reported unemployment rate at its lowest level in approximately four years.
(NOTE: As many readers are aware, changes in the methodology used in computing employment data have changed significantly over the last decade or so. This process has left the accuracy of the numbers increasingly suspect. This is particularly so when using them for historical comparisons. Subscribers to
John Williams' Shadow Government Statistics will be apprised of current distortions in the next edition of the publication, due out next Wednesday.)
The payroll survey represents the number generally more important to the immediate behavior of the financial markets, although it also possesses a good deal of political importance. Today's report indicated job growth of 169,000 during August. This compared with a gain of 188,000 in payroll employment during August of last year.
Today's report contained a net upward revision to combined June and July payroll job creation: June went to +175,000 from +166,000, while July went to +242,000 from +207,0000. Thus, including revisions, payroll employment over the last three months grew by 586,000 jobs, versus the 542,000 gain before the June/July adjustments. (During the same three-month period in 2004, payroll employment rose by 377,000.)
The following table breaks out the reported growth in payroll employment over the trailing three months, versus the same period in each of the prior five years.
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TRAILING THREE-MONTH PAYROLL EMPLOY-
MENT GROWTH (Thousands of Workers)
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Mo. 2005 2004 2003 2002 2001 2000
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Aug. 169 188 2 18 -138 -11
July 242 83 3 -100 -88 176
June 175 106 27 51 -158 -43
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Tot. 586 377 32 -31 -384 122
=== === == === === ===
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For the 12 months ended August 2005, payroll employment expanded by a reported 2.249 million jobs. This compared with an increase of 1.891 jobs during the 12-month period ended August 2004. Over the six-month periods ended August 2005 and 2004, respective reported growth was 1.126 million and 1.284 million.
According to today's report, average hourly earnings rose three cents during August, or by almost 0.2%, to $16.16. This compared with July's $16.13. The July figure was revised up by one cent from last month's report.
Year over year, average hourly earnings rose 2.7%. This compares with a Consumer Price Index that rose 3.1% for the 12 months ended July (latest CPI data currently available).
During the 12 months ended July, the year-over-year gain in the CPI exceeded the year-over-year growth in average hourly earnings in all but one of those months, exhibiting the longer-run loss of real purchasing power based on these particular series.
The table below contains the latest available results for key employment and inflation series. (NOTE: The new material contained in these tables will be posted to the "Data & Charts" section on the GRA website.)
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KEY U.S. EMPLOYMENT AND INFLATION DATA
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PAYROLL
UNEMPLOYMENT EMPLOYMENT AVERAGE HOURLY
RATE CHANGE EARNINGS
(%) (000s) ($s)
--------------- ---------- -----------------
Month Yr. Yr. Yr. Year/
/Year No. Ago No. Ago No. Ago Year
--------------- ---------- ------------------
08/05 4.9 5.4 169 188 16.16 15.74 2.7%
07/05 5.0 5.5 242 83 16.14 15.70 2.8%
06/05 5.0 5.6 175 106 16.07 15.64 2.7%
05/05 5.1 5.6 126 250 16.03 15.62 2.6%
04/05 5.2 5.5 292 337 16.00 15.58 2.7%
03/05 5.2 5.7 122 320 15.95 15.54 2.6%
02/05 5.4 5.6 300 94 15.91 15.51 2.6%
01/05 5.2 5.7 124 117 15.90 15.48 2.7%
=================================================
12/04 5.4 5.7 155 83 15.85 15.45 2.6%
11/04 5.4 5.9 132 96 15.82 15.45 2.4%
10/04 5.5 6.0 282 123 15.81 15.41 2.6%
09/04 5.4 6.1 130 94 15.77 15.40 2.4%
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EMPLOY. COST INDEX (%)* PRODUCTIVITY (%)#
----------------------- ------------------------
Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr.
----------------------- ------------------------
2005 0.7 0.7 - - 3.2 2.2 - - -
2004 1.1 0.9 0.9 0.8 2.1 4.5 1.3 2.5 3.4
2003 1.2 0.9 1.0 0.8 3.1 6.6 9.6 0.8 3.8
2002 0.8 1.0 0.8 0.9 6.5 0.8 4.1 0.2 4.0
2001 1.1 1.0 1.0 1.0 -0.4 5.6 1.5 6.5 2.5
2000 1.2 1.0 0.9 0.9 -2.0 7.2 -0.9 4.0 2.7
1999 0.4 1.1 0.9 1.1 3.6 0.5 2.8 7.1 2.8
1998 0.7 0.8 1.0 0.7 3.2 1.2 4.5 2.1 2.8
1997 0.7 0.8 0.8 1.0 -1.2 5.0 3.4 1.6 1.6
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CONSUMER PRICE INDEX## PRODUCER PRICE INDEX@
-------------------------- ---------------------
Month Yr. Year/ Yr. Year/
/Year Index Ago Year Index Ago Year
-------------------------- --------------------
07/05 195.1 189.2 3.1% 155.1 148.3 4.6%
06/05 194.1 189.3 2.5% 153.5 148.2 3.6%
05/05 194.1 188.8 2.8% 153.5 148.3 3.5%
04/05 194.2 187.7 3.5% 154.5 147.7 4.8%
03/05 193.2 187.3 3.2% 153.7 146.4 5.0%
02/05 192.0 186.5 2.9% 152.5 145.6 4.7%
01/05 191.3 185.9 2.9% 151.9 145.7 4.3%
=================================================
12/04 191.2 185.0 3.4% 151.7 145.3 4.4%
11/04 191.2 184.6 3.6% 152.1 144.6 5.2%
10/04 190.7 184.8 3.2% 151.1 144.8 4.4%
09/04 189.6 185.0 2.5% 148.9 144.1 3.3%
08/04 189.3 184.4 2.7% 148.5 143.6 3.4%
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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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