As you likely heard, US job growth in July came in at 209,000 — and everyone from Pres. Obama to the talking heads of Wall Street were discussing how the US has created 200,000-plus jobs for six straight months and how that was the first time it happened since 1997.
Congratulations!
No one seemed to remember, however, that the number was just a tad lower than what had been expected.
Okay, it was more than a tad lower.
Wall Street had been expecting between 230,000 and 250,000 new jobs, which would have been well below the revised 298,000 new jobs created in June.
What’s going on here? Didn’t the nation’s gross domestic product (GDP) rise sharply in the second quarter? Shouldn’t that have carried over to the July job figures?
As I’ve been saying (and am getting tired of repeating), the government’s monthly job figures are tainted by Performance Enhancing Estimates (P.E.E., for short and for giggles) in the springtime.
The P.E.E. are now slowing.
What I’m saying is that the robust 200,000-plus job string was greatly aided in the spring by the Labor Department’s assuming that phantom, non-confirmable jobs were created.
But those assumptions reverse themselves in August and September.
So, at least for the next two months, don’t expect the statistics to show great monthly job gains — unless, of course, the economy suddenly (and really!) picks up steam.
The September job figures — to be reported on Oct. 3 — should be the most disappointing.
Please don’t confuse this with the other huge issue I’m looking into — the fabrication of data at the Census Bureau.
I’ll get back to that issue shortly — but I hope that Congressional investigators will soon get their act together and have some news, too, on that front.
Along with the slowdown in job growth in July — or perhaps of the strong job growth in the first half of 2014 — the unemployment rate ticked up to 6.2 percent from 6.1 percent.
This happened because 329,000 people rejoined the work force by looking for a job.
Look, no one wants the US economy to recover quickly and in a strong way more than I do. It’s just that I fear Washington is going about it all wrong — by creating a false high.
The Federal Reserve keeping interest rates too low too long robs savers — and pushes investment money into the stock market, which in turn creates a false high.
Labor’s numbers Friday showed that average wages in July were unchanged at $24.25. If the economy is on such a roll, then why aren’t workers given raises?
Plus, the underemployment rate — which counts the number of folks working part-time that would rather have a 40-hour-a-week job plus those unemployed who have given up looking for work — rose in July to 12.2 percent from 12.1 percent.
Those numbers are trying to tell us things aren’t as rosy as the president and Wall Street are claiming.
We just have to listen.