August’s Jobs Report Fails to Meet Expectations

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A deeper dive into the BLS report at a regional level

At first glance, the results of the BLS’ “The Employment Situation – August 2013” report appeared to be quite positive as the report showed the addition of 169,000 jobs and  the national jobless rate decreased slightly, from 7.4 to 7.3 percent, the lowest rate of 2013. Additionally, the national underemployment rate contracted for the second straight month, falling to 13.7 percent.

Some economists quickly pointed out a key statistic from the report, which may have directly caused the decrease in the national jobless rate: the country’s civilian labor force diminished considerably, declining by 312,000. As a result, the United States recorded its lowest labor force participation rate since August 1978 – 63.2 percent.

Although nonfarm payroll employment continued to rise, as it has every month since March 2010, the BLS’ recently published job creation figures were lower than many economists had anticipated as some experts predicted at least 180,000 jobs would be added to the economy.

Furthermore, the total number of employed residents fell to 144.2 million, a decrease of 115,000, in comparison to July’s finalized data. Thus, the employment-population ratio also weakened, from 58.7 to 58.6 percent, the second-lowest rate of the year.

With these changes, some economists believe the decline in the nation’s unemployment rate was a by-product of Americans giving up on their job searches. After all, 11.3 million Americans were without work last month and 4.3 million of these individuals have been unemployed for at least 27 weeks, 37.9 percent of the total jobless population.

Without a doubt, the report was not as encouraging as some economists had hoped for, but it was not entirely disappointing either. The White House reported that, with August’s employment data included, 7.5 million private sector jobs have been created since March 2010. In addition, the total number of Americans working part-time for economic reasons fell to 7.9 million, a decrease of 334,000, typically an indication of hiring and economic progress.

Since August 2012, the nation’s jobless rate has decreased by 0.8 percent, while the total number of unemployed Americans has diminished noticeably, by 1.2 million. On the other hand, total employment has upturned by roughly 2 million during that same timespan.

In the meantime, American employees’ hours and earnings each increased last month. Average weekly hours rose to 34.5, while average hourly and weekly earnings augmented to $24.05 and $829.73, respectively, showing an additional sign that while growth may not be as robust as hoped for, the national economy is gradually improving.

Metropolitan employment trends continued in July

Metropolitan Area Jobs Report Rates August 2013

Throughout the first half of 2013, jobless rates contracted within a majority of the United States’ metropolitan areas, as nonfarm payroll employment steadily upturned. The BLS’ latest “Metropolitan Area Employment and Unemployment” report findings were so consistent that many economists anticipated similar results from the July 2013 version of the report, particularly with regards to national unemployment and hiring trends.

Unsurprisingly, their projections were virtually accurate, as the BLS released one of its most positive metro area employment and unemployment reports of the year on August 28. Not only did 319 of the nation’s 372 metro areas report a year-over-year rise in nonfarm payroll employment, but 320 areas discovered that their jobless rates were lower in July 2013 than they were in July 2012.

A notable area was Bismarck, N.D., which registered the country’s lowest jobless rate, at 2.5 percent, for the third straight month. In contrast, Yuma, Ariz., and El Centro, Calif., yet again recorded the United States’ highest unemployment rates, at 34.5 and 26.1 percent, respectively, a trend that has occurred throughout 2013. Nonetheless, El Centro’s jobless figures were not completely discouraging, as the city documented the largest year-to-year unemployment rate reduction in July – four percent. In all, 119 areas recorded a year-over-year joblessness decrease of one percent or more, from July 2012 to July 2013.

Without question, the nation’s metropolitan employment figures, for the most part, have improved on a consistent basis throughout 2013. And, as revealed below, such economic progress was noticed throughout all regions in July, as the following areas released their most recent employment and inflation statistics.

Source: BLS


The greater Bethesda, Md., area’s Consumer Price Index for All Urban Consumers (CPI-U) and Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) augmented by 1.9 and 1.8 percent, respectively, from July 2012 to July 2013.


Hiring surged within a majority of the greater Grand Rapids, Mich., area’s private sectors from July 2012 to July 2013. The most noticeable increases in employment occurred in the area’s professional and business services and leisure and hospitality industries, as hiring rose by 18.3 and 7.9 percent, respectively, during that time period.


Back in June, Billings, Mont.’s jobless rate rose to 4.4 percent, the highest rate recorded since March, leading some economists to anticipate similar figures in July. However, as a surprise to some financial experts, the city’s unemployment rate diminished in July, falling to 3.9 percent, nearly matching May’s rate of 3.7 percent, the lowest figure of 2013.

New England:

From July 2012 to July 2013, hiring was quite robust within a majority of the greater Boston, Mass., area’s private sectors. The upturn in employment was especially apparent within the information and education and health services industries, as hiring rose by 3.9 and 3.5 percent, respectively.

New York–New Jersey:

Annual inflation continued to upsurge within the greater New York City area in July, as the area’s CPI-U and CPI-W each increased by 2.1 percent, respectively, from July 2012 to July 2013.


Jackson, Miss.’s jobless rate contracted considerably in July, declining from 7.7 to 6.7 percent, the lowest rate recorded since April. Roughly 249,600 residents were employed, an increase of 1,400, when compared to June’s aggregate. On the other hand, total unemployment decreased by 2,800, falling to 18,000, as 267,700 residents were members of the civilian labor force.


Oklahoma City, Okla.’s unemployment rate remained well below the national average in July, declining from 5.5 to 4.8 percent, the lowest rate reported since April. Across the board, the city’s employment statistics were generally encouraging in July. Not only did total employment increase slightly from June to July, rising to 580,400, but total unemployment shrunk, falling to 29,100, a decrease of 4,400.


According to recently released data, the greater Los Angeles area’s annual inflation figures continued to steadily rise this summer, as the area’s CPI-U and CPI-W upturned by 1.3 and 1.6 percent, respectively, from July 2012 to July 2013.

Last month, the public sector reported its first monthly net gain in employment of 2013, as hiring increased slightly, rising by 1,000. The news was certainly welcomed, but some economists were unsure if such progress would continue in August.

Yet, as a surprise to many financial experts, August’s public sector employment statistics substantially exceeded July’s data, as the government reported a net gain of 17,000 jobs, according to the BLS’ “The Employment Situation” report. This number was largely attributed to the hiring of teachers ahead of the school year, and the real test of positive sector growth will be seen in the coming months.

The private sector also reported positive findings, as hiring upturned for the 42nd successive month, rising by 152,000. Once again, employment was wide-ranging, with a majority of sectors, including the following, recording net job gains.

Employment Rates by Selected Industries August 2013


Total sector employment continued to upsurge in August, rising by 32,700, as 14.6 million professionals were actively working. As usual, ambulatory healthcare services accounted for most of the hiring, 26,600 new jobs in all, while nursing care facilities employment rose by 3,400.

Leisure and Hospitality:

As one of the nation’s most consistent job creators, the sector has reported monthly net hiring gains every month this year, with total employment rising by 275,000 since January. Last month, 14.2 million Americans were employed within the sector, as 27,000 new jobs were generated.


After recording a net loss of 17,000 jobs from March to June, sector employment has rebounded lately. Not only did the industry verify a gain of 3,000 new jobs in July, but it also added 14,000 new jobs to the economy in August, the highest monthly total since February.

Professional and Business Services:

Another consistent job creator, total sector employment rose by 23,000 last month, as 18.6 million workers were employed. In particular, professional and technical services reported strong gains, adding 10,900 new jobs to the economy.

Retail Trade:

Since August 2012, total sector employment has increased every month except for December 2012 and March 2013, as the industry has created an average of 32,708 new jobs per month, on average, during that time span. As of August, 15.2 million workers were employed within the sector.

Temporary Help Services:

Last month, 13,100 employees were added to payrolls within the industry, as total employment upturned for the seventh straight month. 181,700 new jobs have been generated within the sector since August 2012.

More to come as economists begin to predict the outcome of the next report from the BLS. What do you think we’ll see for the September edition?

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