According to the August jobs report, the U.S. lost another 54,000 jobs last month and the unemployment rate rose to 9.6%. The government claimed that the private sector added 67,000 jobs, although most of these jobs came from the Health Care and Social Assistance category and from Education, both of which are filled with government supported jobs. The numbers in the BLS (Bureau of Labor Statistics) press release did not agree with the Data Tables and of course made things look better than they actually were.
The data in the non-farm payrolls report indicated that there were 40,200 jobs created in the Health Care and Social Assistance category (the mainstream media almost always leaves off the Social Assistance part, perhaps because these are so obviously government and not private sector jobs). Interestingly the BLS (Bureau of Labor Statistics) press release only admitted to 28,000 jobs and this incorrect number was picked up in every mainstream media article.
The BLS press release, which can be found here, stated “Employment in health care increased by 28,000 in August, with the largest gains occurring in ambulatory health care services (+17,000) and hospitals (+9,000)”.
The Establishment Data Seasonally Adjusted (Table B in the report), which can be found here, stated that the number of jobs in Health Care and Social Assistance increased by 40,200.
The Goods Producing Sector, which actually does include mostly private sector jobs (nationalized companies like General Motors being the exception), was dead in the water in August. The total number of jobs added was ZERO. Goods producing industries include Manufacturing, Mining and Logging, and Construction. Manufacturing lost 27,000 jobs and this contradicts the rosy picture painted by the ISM manufacturing report from two days ago that indicated U.S. manufacturing employment was skyrocketing. Construction kept the Goods Producing Sector from being negative by adding 19,000 jobs. This occurred even though new home sales recently fell to the lowest number ever recorded. Perhaps these workers are busy building castles (or more appropriately, McMansions) in the sky, so of course their work isn’t immediately visible to ordinary mortals such as ourselves.
There is no evidence in the August payroll numbers of any significant non-government related hiring taking place. The first job loss number was reported three years ago in August 2007 and after over $3 trillion in deficit spending since then, the U.S. employment situation has managed to only reach a state of controlled bleeding. There were an estimated 6.6 million students graduating from school this year and eventually most of them will need a job. That implies the U.S. needs 550,000 new jobs a month to absorb former students into the labor force. People are of course always leaving the labor force as well because of retirement and for other reasons such as giving up looking for a job because none are available. It has been generally accepted for a long time that the U.S. must add at least 200,000 jobs a month to just accommodate new people looking for work. Even after getting to that level we are still losing jobs not gaining them. Then there’s an additional 8 million jobs that have to be created to replace those lost during the Credit Crisis. So far, it’s just not happening.
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