Look Again - July Jobs Declined By 198,000

On Friday, August 5, the employment numbers were released by the US Department of Labor for July jobs. The Current Establishment Survey (CES), referred to as the "payroll report," indicated 117,000 jobs were created in July. That was more than the general forecast of 85,000 by economists, although still well below the 150,000 a month needed to absorb new entrants into the labor force. However, it was, nonetheless, heralded by the business press and politicians as "not so bad," considering that earlier in the week reports for manufacturing activity and consumer spending were disastrous - indicating the worst performances in two years for those indicators since the economy's 2009 lows.

But hold on. The 117,000 represent just one part of the Labor Department's monthly reporting of employment, what are called the "B" tables. Those tables reflect a reporting by establishments (businesses) to the Labor Department each month. The problem with the "payroll report" (CES) is that it is acknowledged to be biased toward larger establishments: bigger corporations, with more than 500 employees. Many smaller to medium-sized businesses are not included in the CES report and "B" tables, nor are most of the millions of non-incorporated proprietorships or the nearly ten million self-employed. The latter three groups are reflected in the Labor Department's "A" tables, in a second survey on jobs each month called the Current Population Survey, or CPS.

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