Way too much going on recently to post to the blog, but now there's too many things to discuss. Yesterday, the government released the
July employment report and though it showed a decline in the unemployment rate to 7.4%, the underlying details were quite weak. The headline number indicated that only 162,000 were added, which was less than expected (and gains from previous months were revised downward). What type of jobs were created? Retail trade added 46,800 while food and drinkings place added 38,400 (together accounting for a majority of the net jobs created). That's just for July; what about for 2013 as a whole? Thus far, the economy has added 1.347 million jobs this year, 187,000 of which were in retail trade and 246,500 in food and drinking places. While these two sectors accounted for 18.5% of all jobs at the start of the year, they account for about one-third of net job creation in 2013 (food and drinking places in particular represented 7.5% of jobs at the beginning of the year, yet was the source of nearly one-in-five new jobs so far in 2013).
According to the household survey, part-time employment accounted for about two-thirds of the jobs created in July. So far in 2013, part-time employment accounts for 77% of net job creation (note: 20% of all jobs were part time at the beginning of the year). Since the start of the recession in December 2007, the economy has lost 5.5 million full-time jobs while adding about 3.5 million part-time jobs. The relative importance of part-time employment helps to explain why total hours worked declined in July even though employment increased (note: this isn't the average work week, but an estimate of total hours worked throughout the economy).
Many economists have been trying to reconcile the relatively weak estimates for economic growth with the comparably stronger numbers for employment. The underlying details of the employment report suggest that both measures of the state of the economy reveal an economy growing modestly (to use the Fed's latest description).
