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US Nonfarm Payrolls – flat in August with a negative net revision of 58k

September 3, 2011

US nonfarm payrolls were flat in August, disappointing sharply amid already low market expectations for a gain of 68k. Private sector payrolls rose just 17k versus consensus at +95k and a revised +156k in July (originally +154k). The negative impact of the Verizon strike on the August private payrolls was broadly anticipated, and so the result is particularly disappointing and highlights a continued underlying slowdown in hiring. Information sector payrolls dropped 48k vs. -3k in July, with most of the August decline (-45k) attributed by the Labor Department to the worker strike against Verizon. Excluding this effect, private sector payrolls would have been up about 62k in August, the smallest gain since May’10. Thus the slowing trend in payrolls continued, with the strike-adjusted 3-month average at 98k, down from 138k in Q2 and the year-to-date average of 151k.

The results of the household survey were not quite as bad, with the unemployment rate steady at 9.1% as expected in August, below the level of a year ago (9.6%). Employment rose in August as measured in this survey; up 331k vs. -38k previously although month-to-month developments are volatile. On a year-to-date basis, household-survey employment was up only 421k versus a gain of 1,307k in the same period of 2010, highlighting a sharp loss of momentum. The number of unemployed held broadly steady in August while the wider measure of unemployment, including involuntary part-timers and “discouraged” workers, rose 0.1ppt to 16.2% and was above the 6-month average of 16.0%.

 

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