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August 3, 2007
Non-farm payrolls up 92,000
Approximately 92,000 (seasonally adjusted) jobs were added in July. The number that typically gets tossed around these days as the number required to keep up with population growth is about 125,000. That would suggest that today's figure is a little on the weak side. However, if you look a little more closely, you will see that private (i.e. non-government) employment was up 120,000 while government employment was down 28,000 to yield the 92,000 increase overall.
Nearly all of the decrease in government was at the state and local levels, and half was in local government--education.
Looking back at last month's press release, we find that it was almost precisely the opposite. Private payrolls added 92,000 and government added 40,000 for a total of 132,000. Those numbers were revised today to show private payrolls adding 107,000 and government adding 19,000 for a total of 126,000.
This would suggest to me that private employment is slightly on the weak side. Of course, as Michael Mandel points out, the labor market is becoming very dependent on the health care sector for growth. Health care added over 36,000 jobs in July. I don't think that trend will change any time soon.
Elsewhere in the blogosphere, James Hamilton was not impressed with today's report. Barry Ritholtz says,
The WSJ reported that "Stocks may slide early Friday after a weaker-than-expected July employment report, raising fears that troubles in the housing market may be spreading."
Retail employment was flat, so we're not out of the woods yet.
At this moment, the Dow is down about 30, and S&P down about 8. Hardly a sell-off...the news was probably about what they expected. The week ends with a whimper.
UPDATE: I spoke too soon. Reuters describes a late day surge. And then, a finish with the Dow down over 281 points. It wasn't the payroll report that did it. The Bear Stearns conference call seems to be what drove the late slide.
In case you were wondering, Fed binary options on the CBOT did not move at all today. So despite a lot of commentary to the contrary, those who put their money where their mouth is don't see today's events as impacting Fed policy very much. At the moment, I concur.
Posted by William Polley at August 3, 2007 12:24 PM
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