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  • Writer's pictureNick Andriacchi


Employment Summary, JOLTS Report

Employers added 235,000 in the month of August, way below economists’ expectations.

A report by Michael Farren, a research fellow at George Mason University's Mercatus Institute, found the states that ended participation in federal UI programs experienced employment growth that was twice as fast as those that kept the programs intact.

"A lot of pundits rushed out and said, 'Well, there's no effect, there's no story here everyone just move on," Farren said. He noted that even the research that claimed states saw minimal effects after ending the federal program showed a significant increase in employment compared to states that continued benefits.

A paper authored by economists and researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto showed states that withdrew from the federal unemployment benefits experienced 20% more job growth than the states that remained in the program.

Another study by Goldman Sachs estimated workers' probability of finding a job would be driven entirely by those losing benefits, with job gains concentrated in low-wage leisure and hospitality jobs. The firm also analyzed worker behavior and found "clear evidence that benefit expiration increased the rate at which unemployed workers became employed."

According to its analysis, Goldman Sachs projected that ending federal UI benefits early would have added hundreds of thousands of jobs to the economy. Economists also projected that the expiration of benefits in September would account for 1.5 million job gains through the end of the year

Analysis of the August Employment Report

· Temporary help lost 5,800 jobs in August.

· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 8.8% from 9.2% in July.

· The change in total nonfarm payroll employment for June was revised up by 24,000, from +938,000 to +962,000, and the change for July was revised up by 110,000, from +943,000 to +1,053,000. With these revisions, employment in June and July combined is 134,000 higher than previously reported

· Prime age labor force participation rate (ages 25-54) was flat this month at 81.8%. While the number has improved, it is still down by 1.1% since February 2020, the last month before the pandemic started.

· The overall labor force participation unchanged changed at 61.7%. This is 1.6% below last February (2020) level.

· Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior 4 months. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings

· Average hourly earnings are up 4.3% from the same period a year ago, at a time when concerns are increasing about persistent inflationary pressures.

· In August, the average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2hour over the month to 40.3 hours, and overtime remained at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.

· APD reported that 374,000 jobs were created in August

Source: ADP, BLS, CNBC, ABC News

JOLTS Report July 8, 2021

Job Openings

· On the last business day of July, the number and rate of job openings increased to series highs of 10.9 million (+749,000) and 6.9 percent, respectively. Job openings increased in several industries, with the largest increases in health care and social assistance (+294,000); finance and insurance (+116,000); and accommodation and food services (+115,000). The number of job openings increased in the Northeast, South, and West regions.


· In July, the number and rate of hires were little changed at 6.7 million and 4.5 percent, respectively. Hires decreased in retail trade (-277,000), durable goods manufacturing (-41,000), and educational services (-23,000). The number of hires increased in state and local government education (+33,000) and in federal government (+21,000). The number of hires was little changed in all four regions.


· Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.

· In July, the number and rate of total separations were little changed at 5.8 million and 3.9 percent, respectively. The total separations level decreased in transportation, warehousing, and utilities (-43,000) and in federal government (-9,000). Total separations increased in the Northeast region.

· The number of quits was little changed in July at 4.0 million. The quits rate was unchanged at 2.7 percent. Quits increased in wholesale trade (+34,000) and in state and local government education (+14,000). Quits decreased in transportation, warehousing, and utilities (-25,000) and in federal government (-5,000). The number of quits was little changed in all four regions.

· In July, the number and rate of layoffs and discharges were little changed at 1.5 million and 1.0 percent, respectively. Layoffs and discharges increased in professional and business services (+107,000). Layoffs and discharges were little changed in all four regions.

Net Change in Employment

Source: BLS

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