Another Stinker Jobs Report

The bulls will tell you that 233,000 jobs were created in the US economy in June. They will tell you that the economy has created a million new jobs this year so far and that the unemployment rate has fallen to 5.3%. These are the government's facts but they are facts that paint a very misleading picture of the US economy.

The jobs estimates for April and May were reduced by a total of 60,000, bringing the net for June to just 176,000 in the Establishment Survey of businesses. Downward revisions are not a good sign, often indicating the trend. Meanwhile, the troubling divergence of this data from the Household Survey, which showed a loss of 56,000 jobs, continues.

HH=Household Survey; Est=Establishment Survey; LF=Labor Force

Americans not in the labor force increased 640,000 from May to June. The labor participation rate fell to 62.6%, the lowest since September, 1977. That is why the official unemployment rate fell to 5.3%.

In June, the net increase in part-time jobs was 372,000, which is why average hourly earnings for the month rose only 2 cents. The total number of full-time jobs in the economy remains below the 2007 peak, a clear refutation of the supposed strong job market recovery. Millions of part-time workers would rather work full-time but cannot.

The above chart shows the number of months required for the economy to recover the full-time jobs lost in a recession. From the last recession, it is now 91 months without regaining the November, 2007 peak. Full-time jobs actually declined in June and the shortfall is now an astonishing 800,000 fewer full-time jobs than eight years ago.