Plan B Forum

The US economy added a net 195,000 new jobs in June, official figures show.

The figure was well above economists' expectations of 165,000. Revisions to data for April and May added a further 70,000 jobs to previous estimates.

The jobless rate remained steady at 7.6% of the workforce, according to the data from the Bureau of Labor Statistics.

The dollar and US bond yields jumped as markets expectations rose that interest rates will start rising in a year.

The euro fell three quarters of a cent against the dollar to $1.282, while gold fell almost 3% to $1,214.36 an ounce.

The yield on 10-year Treasury bonds rose from 2.5% to 2.68% to their highest level in almost two years.

Treasury bonds - the US government's cost of borrowing - provide an indication of when markets expect the US Federal Reserve to begin raising interest rates, with many analysts now predicting that a move could come as soon as the end of 2014.

The news was initially welcomed on Wall Street, where the Dow, S&P 500, and Nasdaq all opened higher.

They turned negative mid-morning but regained the higher ground by afternoon trading.

"US employment data came out on the strong side of expectations," wrote Brown, Brothers, & Harriman in a note to clients.

"The jobs data will strengthen expectations of tapering Fed asset purchases,"

Economists paid close attention to the number this month due to concerns that the US Federal Reserve might begin to wind down - or "taper" - its policy of propping up the US economy by buying up debts with newly-created money.

Comments by chairman Ben Bernanke in June that indicated that positive economic data in the coming months might lead to tapering of the Fed's bond buying had roiled markets.

How One Month’s Jobless Fare a Month Later

By CATHERINE RAMPELL


Friday’s jobs report was good, but it’s worth remembering that people already unemployed are still having a terrible time finding work. This is particularly evident from the Labor Department’s flows data, which track the labor force status of individuals from one month to the next. Here’s a chart showing the flows for unemployed workers — that is, if a worker was unemployed last month, what is his or her labor status this month?

Source: Bureau of Labor Statistics, via Haver Analytics. The lines show worker flows from unemployment last month into each of the following statuses in the current month: unemployment, not in labor force, employment.Source: Bureau of Labor Statistics, via Haver Analytics. The lines show worker flows from unemployment last month into each of the following statuses in the current month: unemployment, not in labor force, employment.

As you can see, the most likely outcome for someone unemployed in May was to continue being unemployed in June. The second-most-likely outcome was to drop out of the labor force entirely — that is, stop looking for work. (That’s part of the reason that today’s labor force participation rate is so low, although the biggest flow into the “not in labor force” category still comes from people who are leaving jobs rather than giving up a fruitless job hunt.)

Finally, the third-most-likely outcome was to find a job. Over all, fewer than one in five people who were unemployed in May were employed in June.

Unemployed workers have been more likely to flow out of the labor force than into employment for almost the entire period beginning around December 2008 to the present. This was historically not the case; for the nearly 19 years spanning from February 1990 (when the data series began) to the end of 2008, jobless workers were almost always more likely to find a job than to give up or retire. There were only two months when this was not the case (March 2003 and December 2005).

In June, the number of people flowing from unemployment into employment (2,330,000) was almost as high as the the number flowing from unemployment out of the labor force (2,481,000), but not quite. Fingers crossed, maybe next month we’ll finally see those lines cross each other again.

dgs49 wrote:Catherine is an idiot.

[....]

There is no "good news" in this job market. The number of jobs added this month is just about enough to allow for the new entrants into the work force, and does nothing about those who are looking for work. This is the worst "recovery" in history, as the "normal" recovery shows jobs added at multiples of the mere replacement number.

I agree, if this Prez was a Republican you'd never hear the end of the pissing and moaning about the economy, Because he is a Democrat, he gets a pass

Since this is the "Politics" forum I will point out that the MSM is doing a tremendous disservice to the public by painting this disastrous economy with bright colors, so that our inept President will not be blamed. Not that it is primarily his fault. Just sayin'.