Countdown 58 Day Election

California 28 days until early voting

UNEMPLOYMENT and ECONOMIC DATA AUGUST 2020

THE BUREAU OF ECONOMIC STATISTICS (BLS) AUGUST DATA –Jube Rat ANALYSIS

 The 8.4% BLS official unemployment rate represents 13.6 million individuals unemployed is a deceptive statistic.  This number excludes the following numbers gleaned from the official BLS data I think should be considered as unemployed.  The 13.6 million  excludes the 7.0 million that want a job. BLS summary below shows: “These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.”  The next category of undercount is 2.1 million people marginally attached to the labor force and currently want a job.  The number of discouraged employees a subset of the 2.1 is an additional .5 million.  The total unemployed is 23.2 million not 13.6.  The data ignores reality.  The way I would calculate the rate I would use the total 147.3 total employment against the 23.2 million actually unemployed and the unemployment rate becomes closer to 16%. 

 There are jobs available depending on the industry.  Business postings for jobs rose slightly last week, however it is still 20% less than a year ago. Hospitality, tourism, and fitness sectors have suffered most with postings down by 40%.  Higher wage jobs in banking, finance, and software development postings are scarce. Construction, driving, and warehouse jobs are most plentiful. A survey from the National Federation of Independent Businesses recently found that 20% of those contacted stated they would be out of business if the economic conditions did not improve in six months. (SEE: DATA SUPPLIED IN THE BLS SUMMARY STATEMENT BELOW)

 Last week jobless claims underscore a slow recovery.  The 883,000 individuals filed for unemployment benefits the last week in August.  Of the 21 million jobs lost in March and April only 9 million have been recovered to date.  As of mid-August, more than 29 million Americans were receiving some sort of unemployment insurance.  

  The Consumer Price Index comes out next week and the Trump administration has already signaled it was more important to maintain liquidity and stoke liquidity into the economy to keep up the stock market than rein in inflation by raising interest rates.  That attitude toward market prices hurts those individuals at the lower end of the economic spectrum.

In other economic news, not surprising, the Trade deficit is now at a 12 year high.  The U.S. Trade advisor Peter Navarro was busy being the czar of the response to the Covid-19 virus and had the authorization to utilize the Defense Production Act.  It is his failures on PPE and testing and supplies as well as his being cozy with industry has generated 2 major investigations into his actions.  The Kodak investigation and the Ventilator purchase paying exorbitant amounts and going around the procurement officials.  Busy hawking Hydroxychloroquine he stockpiled as a result of Trump the snake oil salesman saying “what do you have to lose.” Since the FDA withdrew its recommendation for use and recommended against its use in treatment of Covid-19.  He was also busy guaranteeing that everyone paid more for PPE by having the states compete for products.  This activity must have kept his eye off the ball on trade. 

Despite Trump’s new trade deal, USMCA or U.S. Mexico Canada agreement  the trade deficit has grown during the pandemic to record levels.  The July deficit was $63.6 billion which is a combination of the differential in purchases of goods and services from foreign countries.

  The record includes a goods only record of $80 billion.  China and Mexico make up the majority of the $80 billion goods deficit.  China goods trade deficit for July was $31.6 billion a 11.5% increase from June.  Mexico goods trade deficit was $10.8 billion a record high in July, this when Trump claims the USMCA will be a boon for American workers and businessmen.  The trade surplus of services such as insurance and banking was 17.4 billion which is a decline and the smallest services surplus since August, 2012.

The June deficit of 53.5% was the largest trade deficit since July 2008 which was during the 2008-2009 recession.  The trade deficit increase from June to July  was 19%. Economists did not see this coming and as a result the stock market reacted.  The impact to the market to this news was a loss of almost 1,000 points on the DOW industrials.  The 3^rd quarter economic data coming out in October will reflect a potential 1% drop in GDP as a result of trade deficits. 

BELOW IS THE SUMMARY ANNOUNCMENT BY THE BLS

BLS Employment Summary

Friday, September 4, 2020

Technical information: 

 THE EMPLOYMENT SITUATION -- AUGUST 2020

 Total nonfarm payroll employment rose by 1.4 million in August, and the unemployment rate fell to 8.4 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In August, an increase in government employment largely reflected temporary hiring for the 2020 Census. Notable job gains also occurred in retail trade, in professional and business services, in leisure and hospitality, and in education and health services.

Household Survey Data 

 In August, the unemployment rate declined by 1.8 percentage points to 8.4 percent, and the number of unemployed persons fell by 2.8 million to 13.6 million. Both measures have declined for 4 consecutive months but are higher than in February, by 4.9 percentage points and 7.8 million, respectively. 

 Among the major worker groups, the unemployment rates declined in August for adult men (8.0 percent), adult women (8.4 percent), teenagers (16.1 percent), Whites (7.3 percent), Blacks (13.0 percent), and Hispanics (10.5 percent). The jobless rate for Asians (10.7 percent) changed little over the month

 Among the unemployed, the number of persons on temporary layoff decreased by 3.1 million in August to 6.2 million, down considerably from the series high of 18.1 million in April. In August, the number of permanent job losers increased by 534,000 to 3.4 million; this measure has risen by 2.1 million since February. The number of unemployed reentrants to the labor force declined by 263,000 to 2.1 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.) 

 The number of unemployed persons who were jobless less than 5 weeks decreased by 921,000 to 2.3 million in August, and the number of persons jobless 5 to 14 weeks fell by 2.0 million to 3.1 million. The long-term unemployed (those jobless for 27 weeks or more) numbered 1.6 million, little changed over the month

 The labor force participation rate increased by 0.3 percentage point to 61.7 percent in August but is 1.7 percentage points below its February level. Total employment, as measured by the household survey, rose by 3.8 million in August to 147.3 million. The employment-population ratio rose by 1.4 percentage points to 56.5 percent but is 4.6 percentage points lower than in 

February. 

 In August, the number of persons who usually work full time rose by 2.8 million to 122.4 million, and the number who usually work part time increased by 991,000 to 25.0 million. Part-time workers accounted for about one-fourth of the over-the-month employment gain. 

 The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 871,000 to 7.6 million in August, reflecting a decrease in the number of people who worked part time due to slack work or business conditions (-1.1 million). The number of involuntary part-time workers is 3.3 million higher than in February. 

These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time. 

 In August, the number of persons not in the labor force who currently want a job declined by 747,000 to 7.0 million; this measure is 2.0 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

 Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 2.1 million, changed little in August. These individuals had not actively looked for work in the 4 weeks preceding the survey but wanted a job, were available for work, and had looked for a job sometime in the prior 12 months. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, decreased by 130,000 in August to 535,000.