The BLS Jobs Report Covering August 2013: School, Crappy Jobs, and Earnings Gains All at the Top End

By Hugh, who is a long-time commenter at Naked Capitalism. Originally published at Corrente. A complete archive of Hugh’s reports can be found here.

The short version:
August is the month where large numbers of students return to school. The BLS defines the unemployed as those actively seeking work. Since many students are not actively seeking work at this time, the size of the labor force and both the number of employed and unemployed decrease in seasonal terms in August. Consequently, unadjusted, the labor force declined by 1.225 million. The number of employed dropped by 604,000, and the number of unemployed declined by 621,000. (The sum of these two equals the drop in the labor force.) As a reflection of this, the number of part time workers for economic reasons decreased 634,000.

As expected, these declines are moderated in the seasonally adjusted data, with the labor force decreasing by 312,000, and employment dropping by 115,000 and the unemployed by 198,000.

The jobs or business data are, in part, at odds with the people data. While the labor force declined in August, the jobs data show the number of jobs increasing by 169,000 seasonally adjusted and 378,000 seasonally unadjusted. We may look on the seasonally adjusted number as suspect since the July number of 162,000 was revised downward 58,000 to 104,000 (which is below the level needed to keep up with population growth). In any case, the crapification of American jobs continues. Seasonally adjusted, retail trade added 44,000, healthcare 33,000, professional and business services 23,000, and food and drinking places 21,000. If your great ambition in life is flip burgers or work at Walmart, America remains the land of golden opportunity.

Hours increased slightly in August, and weekly pay reflected this, but both these improvements could be due in part to the stripping out of lower paying involuntary part time positions we saw in the household or people data. As usual, most of these gains were concentrated at the top end.

Real trend unemployment is now 5.2% above the “official” rate of 7.3%.

Household/Employment Survey

Potential Labor Force

In August, the potential labor force as defined by the Civilian Non-Institutional Population over 16 (NIP) increased 203,000 from 245.756 million to 245.959 million. Multiplying this by the seasonally adjusted employment ratio for July (58.6%) gives a rough estimate of the number of jobs needed to keep up with population growth: .586(203,000) = 119,000. In July, this figure was 120,000. However, the July jobs number was revised down to 104,000, meaning in July jobs did not keep pace with population growth. It would take consistent 200,000+ trendline job growth per month to cut into the number without jobs by a million a year and we have 20 million without jobs. (See real unemployment below.)

Labor Force

In August, seasonally adjusted, the labor force decreased 312,000 from 155.798 million to 155.486 million

Unadjusted, the labor force decreased by 1.225 million from 157.196 million to 155.971 million principally as students 16 and older went back to school.

Participation Rate

The respective changes in the labor force are reflected in the participation rate, the ratio between labor force and the potential labor force as represented by the NIP. Seasonally, adjusted the participation rate declined two-tenths of a percent to 63.2%. Year over year, the participation rate has been on decline since 2008, and the 2008 level is itself lower than the levels of the Clinton expansion from 1996 to 2000.

Unadjusted, because of the larger drop in the unadjusted labor force, the participation rate fell six-tenths of a percent to 63.4%.


In August, seasonally adjusted, employment decreased by 115,000.

Unadjusted, it fell by 604,000 from 145.113 million to 144.509 million.

Employment-Population Ratio

Seasonally adjusted the employment ratio, the ratio of the employed to the potential labor force of the NIP, declined one-tenth percent to 58.6%.

Unadjusted, it decreased two-tenths of a percent to 58.8%.


In August, seasonally adjusted unemployment fell 198,000 to 11.316 million.

Unadjusted, it fell 621,000 to 11.462 million.

As always, it is important to remember that the BLS uses a restrictive definition for unemployed. It does not mean without a job but want one. The BLS uses a jobseeker model. For the BLS, it means without a job and have looked for one in the last 4 weeks.

Unemployment rate

Seasonally adjusted, unemployment fell one-tenth of a percent to 7.3%.

Unadjusted, it fell four-tenths of a percent to 7.3%.


Full Time vs Part Time Employment

Seasonally adjusted (trendline), full time employment (35 or more hours/week) increased 118,000 to 116.208 million. Part time employment (1 to 34 hours/week) fell 234,000 to 27.999 million.

Unadjusted, full time employment increased 180,000 to 117.868 million. August is usually the peak month in the year for full time employment. Part time employment (actual) fell 784,000 to 26.641 million.

Involuntary vs. Voluntary Part Time Employment

Seasonally adjusted, involuntary part time workers decreased 334,000 to 7.911 million.

Unadjusted, workers in this category, many of whom have gone back to school, fell by 634,000 to 7.690 million.

Voluntary part time workers, seasonally adjusted, increased 211,000 to 19.339 million.

Unadjusted, voluntary part time workers increased by 198,000 to 17.701 million.

As usual, I will note that the distinction between voluntary and involuntary is often in the eye of the beholder. Part time workers for voluntary reasons include those who must work part time because of they are raising children, taking care of a relative, or on Social Security and must restrict their hours to stay below Social Security limits on income. For the workers involved, part time work often is not a voluntary choice.


The U-6

The BLS’ broader measure of un- and under employment, the U-6, dropped, seasonally adjusted (trendline) 0.3% to 13.7%. Unadjusted, it fell 0.7% to 13.6%.

Seasonally adjusted, the U-6 is composed of 11.316 million unemployed, 7.911 million involuntary part time workers, and 2.342 million of the marginally attached (those who have no job but looked for work in the last year but not the last month; a decrease of 82,000 from July), or 21.569 million total, a decrease of 604,000 from last month.

[Standard note]

As said above, the BLS has a restrictive, though internationally recognized, definition of unemployment, that is without a job but have looked for one in the last 4 weeks. The marginally attached are not counted as part of the labor force and their use in the U-6 is an indication that this is what the BLS considers its functional undercount to be.

The BLS also has a more extended category: Not in Labor Force, Want a Job Now (seasonally unadjusted). In August, this fell 571,000 to 6.291 million.

This BLS category does not often reflect well actual movements in the economy. So I have developed a simple alternative to it. I calculate the size of where the labor force should be by multiplying the potential labor force of the NIP by a participation rate characteristic of a solid economic expansion (67%, the Clinton boom was at or above this level for nearly 40 months). The difference between this and the current labor force measures the size of the real BLS undercount, those who do not have jobs but would work if jobs were available to them. This then allows me to recalculate where real unemployment is and where real un- and under employment (disemployment) is.

.67(245.959 million) = 164.793 million (where the labor force should be)

Trend Undercount:
164.793 million — 155.486 million = 9.307 million, an increase of 448,000 from July

Current Undercount:
164. 793 million — 155.971 million = 8.822 million, an increase of 1.361 million

Real Trend Unemployment (that is seasonally adjusted) :
11.316 million (U-3 unemployment) + 9.307 million (undercount) = 20.623 million, up 250,000
20.623 million / 164.793 million = 12.5%, up 0.1% from last month

Real Unemployment Now (i.e. seasonally unadjusted) :
11.462 million (U-3 unemployment) + 8.822 million (undercount) = 20.284 million , up 740,000
20.284 million / 164.793 million = 12.3%, up0.4%

Real Trend Disemployment:
Real Trend Unemployment + involuntary part time workers seasonally adjusted = 20.623 million + 7.911 million = 28.534 million, down 84,000
28.534 million / 164.793million = 17.3%, down 0.1%

Real Disemployment Now:
Real Unemployment Now + involuntary part time workers seasonally unadjusted = 20.284 million + 7.690 million = 27.974 million, up 94,000
27.974 million / 164.793million = 17.0%, up 0.1%

The summer bounce is ending and real unemployment and disemployment now are coming back into line with trendline numbers.

The number of long term unemployed (6 months or more) dropped 82,000 to 4.246 million. The long term unemployed account for 37% (unchanged from May-June) of the U-3 unemployed. Year over year, the long term unemployed have fallen by 921,000. It is not clear how many found employment and how many simply stopped looking for work.

White unemployment improved decreased 0.2% to 6.4%. White teen unemployment increased 0.2% to 20.5%. The more volatile African American unemployment increased 0.4% to 13.0%. African American teen unemployment decreased 3.4% to 38.2%.

Self-employed non-agricultural, unincorporated, workers decreased 153,000 seasonally adjusted to 8.678 million, and unadjusted decreased 228,000 to 8.782 million.

Establishment/Business/Jobs Survey


Seasonally adjusted the private sector added 152,000 jobs and government, 18,000 yielding the reported 169,000 total. June which had previously been revised down 7,000 to 188,000 was further revised downward another 16,000 to 172,000. July took a big hit and was revised down 58,000 from 162,000 to 104,000. This casts doubt on the August number.

Seasonally adjusted total nonfarm jobs were 136.133 million. Total private were 114.302 million.

Unadjusted, total nonfarm jobs increased 378,000 to 135.961 million. Private sector jobs were up 154,000 to 115.218 million. If last year is any guide, next month the private sector should lose about 350,000 and government (i.e. public education) should gain about 950,000. The business survey is a month behind the household survey in showing the effects of the beginning of the school year.

In terms of job creation, I find the unadjusted numbers more informative as to the direction and condition of the economy.

Unadjusted, construction was up 26,000 to 6.085 million. Manufacturing rose 52,000 to 12.063 million. For all the talk of fracking, jobs in oil and gas extraction rose by only 1,700 in August (199,100) and only 8,500 since January. Fracking may be having a big impact on the environment but it has not had much of one on jobs.

Among our economy’s shit jobs, retail trade grew by 54,800 to 15.2483 million. Interestingly, the motion picture and sound recording industry lost 29,400 to 369,100 for whatever reason, perhaps the lack of any or few big summer blockblusters. Financial activities also dropped 20,000 to 7.952 million. Professional and business services gained 51,000 to 18.743 million, of which temp jobs grew by 64,700 to 2.7497 million. This is an increase year over year of 185,300 and is slightly ahead of the August 2006 number of 2.727 million. Healthcare jobs increased by 36,700, most of which were in ambulatory healthcare services (33,900). Leisure and hospitality lost 22,000 to 14.833 million, of which arts, entertainment and recreation lost 43,700 to 2.2901 million and food services and drinking places gained 25,000 to 10.5684 million.

Hours and Earnings

Average weekly hours for all employees on private nonfarm payrolls increased a tenth of an hour to 34.5 hours (the same as June). Average hourly earnings increased 5 cents to $24.05/hour and average weekly earnings grew $4.13 to $829.73.

Average weekly hours for production and nonsupervisory (blue collar and clerical) personnel were unchanged at 33.6 hours. Average hourly earnings increased 4 cents to $20.20 and average weekly earnings increased $1.34 to $678.72. In retail trade, average earnings increased by only one cent to $14.00/hour.

As I mentioned last month, since four-fifths of workers are in production and nonsupervisory jobs. It is easy to see that most of the average increase in earnings for all workers actually comes from increases in the top fifth of workers. That is while the bottom four-fifths had an average weekly increase in earnings of $1.34, the top fifth must be averaging an increase of $19.26/week for things to balance out, if you can call such unequal increases a balance.

Household data (Employment/unemployment)
Statistical significance: +/ – 400,000
The A tables:
A 1 for most information and categories
A 2 Unemployment by race
A 8 Part time workers
A 9 Full time workers
A 12 Duration of unemployment
A 15 U 6 un- and under employment
A 16 Persons not in labor force

Establishment date (jobs)
Statistical significance: +/ – 100,000
The B tables:
B 1 Total jobs and jobs by industry/type
B 2 Weekly hours, all employees
B 3 Hourly and weekly earnings, all employees
B 6 Weekly hours, blue collar
B 7 Hourly and weekly earnings, blue collar

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. s spade

    Jobs may have been the answer in 1962, but they aren’t likely to be the answer any time soon. Business simply doesn’t need all the people who need to work in order to live. Perhaps government make work could solve the problem, but I doubt it. A better solution might be to reduce the hours of employment by half in all the thankless jobs that keep the society afloat. That doubles the number of people working, since the work still has to be done. If you double the rate of pay then everyone gets a chance to work and to live as well.

    1. Robert Frances

      s spade – Well-stated. Technology destroys exisiting jobs, which is a GOOD THING since that means we can produce the same or more for less effort. The computer – and especially the internet – radically changed work structures since so many pieces of the production process can be sliced, diced and outsourced to the cheapest providers anywhere on earth. Many of the places where work segments are being transferred have far lower wage rates than the US, Europe and Japan. Even some high-paying legal, accounting and marketing functions are especially well-geared to outsourcing to low-wage English speaking countries since the basic skill set is essentially the same.

      Like you say, the only solution that makes sense is to reduce the work-week to a level that matches full employment, or even up to a NEGATIVE 10% unemployment rate. With a modest “labor shortage” coordinated with a shorter work week companies will focus on their most productive activities, which will benefit all of society. The “wage inflation” scare mongering we often hear about when “full-employment” is discussed is mostly from capital owners or their sympathizers who don’t want to share more profits with the people actually producing the goods and services.

      Shorter work weeks can be introduced gradually into the system. As a start, the largest businesses and all government agencies should be required to offer 1-4 day work shifts (10-32 hours) to all employees/contractors. Millions of people will be happy to work only 1, 2 or 3 days a week, which will create millions of jobs for others. Some of the workers with their new 2-3 free days will start small businesses, or pursue hobbies or volunteer, which will boost overall economic output and social well-being.

      No government deserves to last if it can’t provide employment for all of its people. Shorter work weeks are the easiest way to accomodate full employment since it still relies on each individual to take some responsibility to find the most suitable tasks available. Changing tax policy to eliminate regressive payroll and sales/VAT taxes on working people, and substituting the tax revenue with higher taxes on the largest earners of rent, interest and capital gain income, will also give a big boost to the incomes of lower and middle-income working people so that even if they work a day or two less, their net income is the same with the much reduced tax burden.

      1. Carla

        “No government deserves to last if it can’t provide employment for all of its people.”


        It’s very possible that the standard work week should be reduced post haste, and I have no argument with the more equitable tax structure you outline.

        However, a lot of essential work simply is not being done at all. One example: in many of our largest metropolitan areas, ancient fresh water and sewer infrastructure is falling apart. Municipalities and counties are raising rates (another form of tax) beyond residents’ ability to pay, yet still this needed work is not being done.

        1. Cujo359

          “However, a lot of essential work simply is not being done at all. One example: in many of our largest metropolitan areas, ancient fresh water and sewer infrastructure is falling apart.”

          That’s an area of neglect I hadn’t heard of before, but there are lots of them. Our transportation infrastructure is another, of course, as is emergency preparedness, particularly out here in the West. Education is another area where nowhere near enough attention has been paid lately.

          Lots of opportunity for employment, IOW, even if we’re just doing what is necessary. Add to that what is wise – energy conservation and clean energy, space exploration, and more scientific research, to name a few, and there’s plenty of work for everybody.

    2. posa

      S man— you’d have a case if we were making more stuff with fewer people… we’re not… Federal Reserve data on output and manufacturing find both below 2007 levels… especially manufacturing, which is hanging about 5% below what it was during the phlegmatic Bush “top” in 2007

  2. psychohistorian

    Another stellar report by Hugh about immoral labor force numbers.

    Almost 40 years ago when we had this sort of unemployment we created Public Service Employment under the CETA legislation to provide interim employment during the downturn of the time. I was a junior administrator in the Office of the Governor of Washington State and we set up and administered this program for 32 out of 39 counties in the state.

    We provided employment and project services just like we need now. Was there abuse? I wrote a poem that was turned into a one time play that exposed abuse by some bureaucrats of the day but looking back it was overshadowed by the infrastructure improved and the services provided along with the employment of thousands.

    I was able to see first hand what this sort of program did to help people through that economic transition. We could and should be doing that now, BIG TIME, but our government, owned by the plutocrats has other intentions.

    Ongoing and escalating war of Empire has replaced humanistic government. My heart cries for all the wasted humanity in our wars and because we won’t help our fellow citizens through economic dislocation, not of their doing….an ongoing double loss.

    I want to make this evil stop. My current understanding of how to do that is to take away the inheritance and accumulated private ownership of property of the plutocrats that are directing this form of social genocide…..sooner, rather than later.

    We need to laugh them out of their evil direction/control of us.

  3. LucyLulu

    “White unemployment improved decreased 0.2% to 6.4%. White teen unemployment increased 0.2% to 20.5%. The more volatile African American unemployment increased 0.4% to 13.0%. African American teen unemployment decreased 3.4% to 38.2%.”

    Another interesting related factoid I recently heard. I can’t verify it but it sounds about right. (And those like Limbaugh are claiming we no longer need affirmative action, there is now reverse discrimination.)

    Official unemployment for whites has never exceeded 10%. Official unemployment for African-Americans has never fallen below 10%.

  4. John

    In layoffs, one, two, three times from 2008 until the present, many of my white friends are in serious trouble with employment.

    Every new job they have managed to get has been 30%, 40% 60% less money. Most of the new jobs have only lasted though a few quarters and they are laid off in one of the now near content layoff rounds. (Any new hires are younger and paid way less) Now it’s moving into the part time and no benefits territory.

    These are people who were making anywhere from $80,000 to $225,000 dollars in salary.

    None of them have a pension.

    Severe poverty is coming to the tail end of the baby boomer generation.

  5. MikeNY

    Yes, the jobs crisis continues unabated.

    Reading this post in conjunction with David Dayen’s posts yesterday, the conclusion I draw is that QE in the absence of fiscal expansion is nothing but trickle-down on steroids: Let them eat crumbs!

    Why anyone other than the plutocrats would support more of this policy is beyond me. It is an aspirin prescribed for gunshot wounds.

  6. Jackrabbit

    How about a chart of Real Unemployment and Real Disemployment? Maybe also include the Govt unemployment numbers for comparison.

    It seems like we’ve been at 12.5% and 17 something for a long time (while Govt-calculated numbers keep going down).

    Oh, and don’t bury the lead! This sentence should be the headline:

    “Real trend unemployment is now 5.2% above the “official” rate of 7.3%.”

    Lastly, it seems like a new measure is in order: Middle-Class Wealth Extraction (MCWE). How much money is the average family losing from:
    * unemployment,
    *disinvestment in the commons,
    * wasteful spending (over-investment in military, police, prisons, etc.),
    *over-priced goods and services due to non-competitive practices (like healthcare),
    * borrowing from the future (govt debt payments, underfunded pensions, etc.)
    * and more.

    Ordinary people respond to actual numbers. So saying that inequality is up in the last 10 years is not as meaningful to many as a statement like:

    the average family has lost 4% of their income to MCWE last year or $2,349, and $47,971 in the last 10 years (nearly a whole year’s work – with half of that coming directly from the 2008 financial crisis).

    (Note the above numbers are just guesstimates.)

  7. rich

    Cash-Strapped Philadelphia Schools Ask Parents To Fill Gaps

    The Philadelphia school system was forced to cut millions of dollars from its budget, lay off hundreds of employees and shutter nearly two dozen schools to help close a billion dollar shortfall. Some principals are asking parents to “contribute” as much as $600 per student to help pay for basic supplies and the school superintendent threatened to delay the start of classes this month until the city kicked in $50 million to cover the minimum level of staffing.

    BRADY: At one point this summer, superintendent William Hite said he would have to delay the first day of school unless the city came up with $50 million to hire back laid-off support staff. The money came through just before a deadline. Now the issue is teacher pay. A contract with the Philadelphia Federation of Teachers expired last weekend. The union is offering a wage freeze but the district says it needs pay cuts between 5 and 13 percent. That prompted the union to launch a public campaign targeting Philadelphia’s Democratic mayor and Pennsylvania’s Republican governor.

  8. Hugh

    Americans are not losing jobs to technology. Technology plays a very small part in all this. They are losing jobs to the 20 million Chinese who are leaving the country for the cities each year. They are losing jobs to the cheaper H1B visa holders being imported by the big corps. They are losing jobs because they don’t have unions, or government, to protect their rights and benefits. They are losing jobs or being forced into crappier ones because they are being looted by Wall Street and the managements of the companies they work for. They are losing jobs because the result of all this is massive wealth inequality, unsustainable debt for themselves, and depressed aggregate demand.

    There is actually a great deal of socially useful work that needs to be done in this country that could employ anyone who wants to work: rebuilding our crumbling infrastructure, industrial base, and communities, and doing this in a sustainable fashion, taking care of our sick and elderly, and educating our young.

    None of this will happen as long as the looters, the rich and elites, are in control. And guys like me will be left to chronicle the slow, inexorable decline into madness, hopelessness, and despair of what was once a great and beautiful country and people.

  9. allcoppedout

    You have to dig quite a lot to find the similar figures for the UK. It’s clear we have been lied to on unemployment and much of the story is now told in tax credits, disability and various part-time coping measures. Various academics have done ‘spot check’ research showing actual ‘not working’ as high as 18% in Woking (well off) to 57% in parts of Glasgow.

    As Hugh says in his last lines above, we are more or less bearing witness. There is nothing political to do unless Occupy goes large. I don’t see any answers in economics, even at the company doctor level. The lies are in too deep and public argument/scrutiny is more or less none existent.

    I find most people can’t be shaken from elitism as meritocracy and themselves as successes in equal opportunities. We were told working hard to get university qualifications would somehow make us the ‘smart workers’ of the ‘new economy’. Yet I’ve seen no decent research to support either that education benefits those not fairly naturally ranked highly in education’s highly restricted teaching, or the content of most education having transferrable relation with the workplace. Germany has retained and improved its technical schools and the industry that benefits from them. We destroyed our system at this level in favour of a cop-out on academic standards by lowering the bar to qualify kids to enter university – and then making them take on debt for diminished, largely book-taught courses with the very content and method of teaching we knew not appropriate to practical learning. Resistance was futile.

    I think it is bigger than the rich and elite Hugh. Somehow the tax thefts, derivatives and the rest are linked to the care worker complaining new kwality standards prevent her from making a jam butty for a hungry kid in the night and they now get the ‘more sustaining’ nothing.

    1. Unusual Uses for Garlic : A Real Black Person

      Merit is elitist since we do not all posses equal merit but the point of merit is that it satisfies our psychological needs for competition and dominance. In many cases, sometimes the best ideas and best work come from a competitive environment.

    1. A Real Black Person

      Hugh is choosing to be dishonest. The evidence that technology since the dawn of mankind developed to be labor-saving is overwhelming.

      He also has a sentimental concept of what America was in the past. America was and is largely concerned with the concerns and whims of capitalists not social programs or great infrastructure.

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