This morning the Bureau of Labor Statistics (BLS) reported that non-farm payrolls rose by an estimated 163,000 during July on a seasonally adjusted basis. Private sector payrolls increased by 172,000 during the month and government sector payrolls declined by 9,000.
Despite the better than expected gain in non-farm and private sector payrolls, using the White House’s own metrics of measuring job gains from the cycle low, the Obama recovery remains in last place among post-World War II recoveries lasting more than a year.
The White House will tout the fact that private sector payrolls have grown for 29 straight months adding 4.5 million jobs, a gain of 4.26%. Other post-World War II recoveries have averaged a gain of 8.2% over a comparable period. If private sector payrolls had grown by 8.2%, the economy would have created 8.7 million private jobs – leaving the Obama recovery lagging the average of the other recoveries by 4.2 million private jobs.
If this recovery had proceeded at the pace of the Reagan recovery of the 1980s, private sector payrolls would have risen by 11.1% or 11.8 million putting the Obama recovery’s private sector jobs gap compared to the Reagan recovery at 7.3 million. This would equate to the economy having 2.9 million more private jobs than in January 2008 when private sector employment peaked at the beginning of the recession.
The unemployment rate ticked up to 8.3% during July – significantly higher than the level the Obama Administration projected that the passage of its massive stimulus legislation would produce. This marks the 42nd consecutive month that the unemployment rate has remained at or above 8.0%.
The unemployment rate is calculated from the Household Survey. The number of unemployed counted in this survey rose by 45,000, the number of employed persons fell by 195,000, and the labor force declined by 150,000. The number of individuals not in the labor force that currently want a job rose by 34,000 to nearly 6.6 million.
The unemployment rate peaked at 10.0% during October 2009. Since that time, the rate has declined to 8.3%. However, during that period the labor force participation rate has declined from 65.0% to 63.7%. If labor force participation had remained at the 65.0% registered in October 2009, the unemployment rate would have actually inched up to 10.1% rather than declining to 8.3%.