The Employment Situation Summary from the BLS was released today. Nonfarm payroll employment declined by 267,000 in the previous month. This was due in large part because of the initial jobless claims have been falling quickly in the past few weeks. The unemployment rate drops from 9.5% in June to 9.4% in July.
However, even when taking the broader unemployment figures, which account for those receiving benefits, those that are working part-time due to economic reasons, and those that have given up looking (called the U-6), the rate is 16.3%. However, this number is down 0.2% from last month when it was at its highest. It's too early to say that this is a peak in the U-6 unemployment rate, but it is notable as every previous month has seen an increase in this number and we are now seeing a decrease.
Also of note:
- The average number of hours worked increased by 0.1 to 33.1.
- The average hourly wage increased by $0.03/hour.
- These combined to increase paychecks by $2.85/work week or just under half a percent.
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1. Minimum wage rate increase
2. Summer employment (or lack of)
3. Impact of "Cash for Clunkers" program
4. Oil price increase
5. Expectation that these unemployment stats will not turn positive until summer of next year
6. Continuing housing foreclosure problem
7. More ARMs balooning in the next year to two years