Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months.
The Labor Department says companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate. The jobless rate was unchanged at 9.5 percent.
Overall, the economy lost a net total of 131,000 jobs last month, as 143,000 temporary census jobs ended.
A generally weak labor report as created some selling in the stock market. As I have said before, labor trends, regardless of short-term headline observations, are not driving capital flows. The trend in stocks is determined by capital flows. My August 6th comments about stocks still apply.
The break down of the labor report illustrates an anemic economic recovery that will be addressed with further stimulus and quantitative easing.
Total Nonfarm Payroll Employment (NFP) And YOY Change:
Trucking and warehousing job growth which provides excellent insight to the strength of consumption within a global economy remains weak.
Truckers and Warehousing Payroll And YOY Change:
The job creation histogram which reflects job creation/(destruction) relative to change in the labor force shows only minimal, relative job creation. Unfortunately for workers, job creation as the labor force contracts means tough competition for existing jobs. This statistical reclassification of workers reveals how household unemployment rate, reported today at 9.5%, remains below 10%.
Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.
The birth/death model provides a comparison of 2004 and 2010. Both periods are early liquidity phase injections. 2010’s economic recovery is clearly weaker than 2004 from a labor standpoint.
Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):
Source: finance.yahoo.com
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