May Jobs Report Shows Fewest New Private Sector Jobs in a Year

👩🏻‍🏭👷🏻‍♂️Fewest New Jobs in a Year 👨🏻‍🏭👷🏻‍♀️ 🏢⚒

THE ADP NATIONAL JOBS REPORT SHOWS PRIVATE SECTOR EMPLOYMENT INCREASED BY ONLY 128,000 JOBS IN MAY🍜🍝 

Only 128,000 new jobs in the US in May vs 247,000 new jobs created in April.

"Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels," said Nela Richardson, chief economist, ADP. "The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late."

So much for a booming economy... Will the Fed continue to raise rates at 0.50% per meeting while slashing QE bond buying with this data showing economic growth has slowed, especially with struggling small businesses?

It looks like April was revised lower by 45,000 too as they showed 247,000 on the April report but in the May table they show only 202,000!  

Four straight months of falling numbers.  Will this be blamed on Putin?

Discuss this article on my Facebook Group at: 

• THE ADP NATIONAL JOBS REPORT SHOWS PRIVATE SECTOR EMPLOYMENT INCREASED BY ONLY 128,000 JOBS IN MAY

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I Was Wrong. High Taxes Only Bad for Manufacturing Jobs

I was wrong.... I used to think high tax rates for corporations were bad for all jobs. My argument was corporations would move from high tax places like the San Francisco Bay Area or New York City to cities, states and even countries with lower corporate taxes. This was only partially right and we have the housing and job boom in the San Francisco Bay Area as proof.

I blame Massive Pension Obligations for Runaway Growth and Gridlock.

If you live in the Bay Area or visited recently, you will see how the local governments are handling their massive pension debts. They sell our quality of life to developers who build MASSIVE housing projects for expensive housing for the new, high tech workers they allow into the area.

Some fight the conversion of low cost housing and business rentals to expensive homes for both altruistic (the poor who care for your kids need a place to live nearby) and selfish (less gridlock) reasons.  Cities allow massive, expensive housing to create gridlock as they need the tax dollars.  Do any locals benefit from 1B/1B apartments that cost over $5,000 a month to rent in what used to be a Sears parking lot?

• The Village on San Antonio Rates

This UGLY building blocks our once beautiful view of the mountains while contributing to the massive gridlock on San Antonio Road at the Palo Alto, Mountain View and Los Altos border.  I have no need for another place to buy a $50 lunch or a $5 coffee either.

While saying we need "affordable housing" they are in the process of closing down the trailer park in Palo Alto so the citizens, mostly low skilled "immigrants" who take care of the yards, homes and kids of the wealthy in the area. They live in tiny mobile homes here so they can send their kids to the great Palo Alto schools. Some in Palo Alto want them to stay and are trying to compensate the land owners via tax dollars to let the trailers stay. 

• See NONPROFIT GROUP HOPING TO SAVE BUENA VISTA MOBILE PARK IN PALO ALTO

This is land where they can easily build $2M condos in a huge high rise and raise a bundle of taxes since the location is but a short bike ride from Stanford and about equal distant from Google and Tesla, maybe 2 miles away.

Low rent housing and family business are getting pushed out and the cost to live here is soaring.

All the property taxes on the new development will pay the promised pensions. They know it is either do this or cut programs to generate the funds to fund the pension shortfalls.

It is gridlock all over the Bay Area....

I was wrong that massive taxes hurt jobs. 

I need to modify that to high taxes are bad for "working class jobs" such as manufacturing. 

When I started as a summer intern at HP in 1978, we had hundreds of workers doing assembly from chips to finished products.  These were great jobs that didn't require a college degree but had good pay and benefits.  Now none of these jobs are done here as Apple and HP build their products in China.

Cypress Semiconductor CEO TJ Rogers said on TV that he'd have to pay about 9% sales tax just to buy equipment to build a new fab here in Taxifornia... then there is the 2% a year property tax on the land and equipment.  

The super smart who built the internet or are building the new things today will just charge more for our services so we can live wherever we want. The people who came up with software to run Uber or Lyft get rich while the workers all around the World find out how little they are worth if people have the opportunity to look for price competition.

The VCs and CEOs can afford housing that doubles.  Two lots in the area recently sold for about $2M each and they were both torn down to build beautiful new homes that can probably sell for $3.5M to $4M.

• See Los Altos Real Estate Gains 12.9% in 2014

The realtors told me many paid cash and there are many with cash after $10M "liquidity events" such as Tesla, Facebook and Twitter IPOs... not to mention soaring Apple stock and massive Google stock options to insiders.

Rather than raise the minimum wage, which will drive more restaurants to follow the lead of Armadillo Willy's that eliminated wait staff long ago to save on total cost of the bill and save labor costs, we need to cut the corporate tax to zero or at least make it very low.  

Perhaps have a zero corporate tax rate for companies who manufacture as much in the US as they sell here while those who manufacture more overseas pay 25% to bring money earned overseas back to the US.    Companies will use the money to hire workers here and we can tax the workers to recover the taxes we were not going to get anyway as they continue to build overseas.  Fix the laws so individuals can't avoid our high, personal tax rates by becoming a corporation... 

What do you think?

August Unemployment Rate - Jobs Report Summary

Today the U.S. Bureau of Labor Statistics reported job creation was weak and the unemployment rate remains high.  The number of jobs created was well below the 150,000 estimated new jobs needed to keep up with population growth.  Currently the unemployment rate in the US is 8.1% and only 96,000 new non-farm jobs were created by the economy in August according to the U.S. Bureau of Labor Statistics.  Yesterday ADP, a private company, estimated private sector employment grew by 201,000. Below is a summary of the official data from both releases.

August BLS Employment Situation Report

Friday September 7, 2012:  Total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, in professional and technical services, and in health care.

Household Survey Data

The unemployment rate edged down in August to 8.1 percent. Since the beginning of this year, the rate has held in a narrow range of 8.1 to 8.3 percent. The number of unemployed persons, at 12.5 million, was little changed in August. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (7.6 percent), adult women (7.3 percent), teenagers (24.6 percent), whites (7.2 percent), blacks (14.1 percent), and Hispanics (10.2 percent) showed little or no change in August. The jobless rate for Asians was 5.9 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)

In August, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.0 percent of the unemployed. (See table A-12.)

Both the civilian labor force (154.6 million) and the labor force participation rate (63.5 percent) declined in August. The employment-population ratio, at 58.3 percent, was little changed. (See table A-1.)

In August, 2.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (These data are not seasonally adjusted.)

These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 844,000 discouraged workers in August, a decline of 133,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in August had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See
table A-16.)

Thursday ADP Report (pdf)

September 6, 2012 – Private-sector employment increased by 201,000 from July to August on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The ADP National Employment Report, created by Automatic Data Processing, Inc. (ADP®), in partnership with Macroeconomic Advisers, LLC, is derived from actual payroll data and measures the change in total nonfarm private employment each month. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000.

U.S. Nonfarm Private Employment Highlights – August 2012 Report:

• Total employment: +201,000
• Small businesses:* +99,000
• Medium businesses:** +86,000
• Large businesses:*** +16,000
• Goods-producing sector: +16,000
• Service-providing sector: +185,000

Addendum:

• Manufacturing industry: + 3,000

* Small businesses represent payrolls with 1-49 employees
** Medium businesses represent payrolls with 50-499 employees
*** Large businesses represent payrolls with more than 499 employees
Note: All data included in the ADP National Employment Report is based on size

According to today’s ADP National Employment Report, employment in the nonfarm private business sector rose 201,000 from July to August on a seasonally adjusted basis. Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August, while manufacturing employment rose 3,000, following an increase of 6,000 in July. Construction employment rose for the third consecutive month, adding 10,000 jobs, marking the best reading since March. The financial services sector added 8,000 jobs from July to August, marking the thirteenth consecutive monthly gain.

Carlos A. Rodriguez, president and chief executive officer of ADP, said: “According to this month’s ADP National Employment Report, the U.S. economy added 201,000 jobs in August, the largest increase in five months. The improvement in job creation this month is encouraging and we hope it continues across all sectors of the U.S. economy.”

June Jobs Report

Today the Bureau of Labor Statistics of the U.S. Department of Labor released the June 2012 Jobs report. 80,000 new jobs were created in June while the unemployment rate remained the same at 8.2%. Highlights then the full press release follow:

• Nonfarm payroll employment continued to edge up in June (+80,000), and the unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today.  
• Among the major worker groups, the unemployment rate for blacks (14.4 percent) edged up over the month, while the rates for adult men (7.8 percent), adult women (7.4 percent), teenagers (23.7 percent), whites (7.4 percent), and Hispanics (11.0 percent) showed little or no change. The jobless rate for Asians was 6.3 percent in June (not seasonally adjusted), little changed from a year earlier.

• The change in total nonfarm payroll employment for April was revised from +77,000 to +68,000, and the change for May was revised from +69,000 to +77,000.

Full Report:

THE EMPLOYMENT SITUATION -- JUNE 2012

Nonfarm payroll employment continued to edge up in June (+80,000), and the unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today. Professional and business services added jobs, and employment in other major industries changed little over the month.
Household Survey Data

The number of unemployed persons (12.7 million) was essentially unchanged in June, and the unemployment rate held at 8.2 percent. (See table A-1.)

Among the major worker groups, the unemployment rate for blacks (14.4 percent) edged up over the month, while the rates for adult men (7.8 percent), adult women (7.4 percent), teenagers (23.7 percent), whites (7.4 percent), and Hispanics (11.0 percent) showed little or no change. The jobless rate for Asians was 6.3 percent in June (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)

In June, the number of long-term unemployed (those jobless for 27 weeks and over) was essentially unchanged at 5.4 million. These individuals accounted for 41.9 percent of the unemployed. (See table A-12.)

Both the civilian labor force participation rate and the employment- population ratio were unchanged in June at 63.8 and 58.6 percent, respectively. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In June, 2.5 million persons were marginally attached to the labor force, down from 2.7 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 821,000 discouraged workers in June, a decline of 161,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in June had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment continued to edge up in June (+80,000). In the second quarter, employment growth averaged 75,000 per month, compared with an average monthly gain of 226,000 for the first quarter of the year. Slower job growth in the second quarter occurred in most major industries. (See table B-1.)

Professional and business services added 47,000 jobs in June, with temporary help services accounting for 25,000 of the increase. Employment also rose in management and technical consulting services (+9,000) and in computer systems design and related services (+7,000). Employment in professional and business services has grown by 1.5 million since its most recent low point in September 2009.

Employment in manufacturing continued to edge up in June (+11,000). Growth in the second quarter averaged 10,000 per month, compared with an average of 41,000 per month during the first quarter. In June, employment increased in motor vehicles and parts (+7,000) and in fabricated metal products (+5,000).

Employment continued to trend up in health care (+13,000) and wholesale trade (+9,000) in June.

Employment in other major industries, including mining and logging, construction, retail trade, transportation and warehousing, financial activities, leisure and hospitality, and government, showed little or no change.

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours in June. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was 3.3 hours for the fifth consecutive month. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours. (See tables B-2 and B-7.)

In June, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $23.50. Over the year, average hourly earnings have increased by 2.0 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $19.74. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for April was revised from +77,000 to +68,000, and the change for May was revised from +69,000 to +77,000.

____________ The Employment Situation for July is scheduled to be released on Friday, August 3, 2012, at 8:30 a.m. (EDT).

Idea to Create Jobs

Background:  I read cash rich companies like Microsoft (MSFT Charts & Quote) and Cisco (CSCO charts and quote) are BORROWING BILLIONS of dollars to pay dividends and repurchase their stock because much of their cash is overseas.  If they bring the cash back to the US to hire workers here, pay dividends or buy back their own stock, then they are taxed so it is cheaper for them to borrow the money.

Idea #1:  Why not let companies bring their cash made overseas back to the US if used to grow employment here?  That is if they grow their workforce by $1B over 5 yrs (2,000 jobs that pay $100,000 salary over 5 yrs) then they can bring back $1B tax free.  If they reduce their US employment over that 5 yrs, then they have to repay the taxes due.

Idea #2: Even simpler, since dividends are taxed, why not let companies use overseas cash to increase their dividends?  This would be great for IRAs since the dividends would eventually be taxed as ordinary income when savers take the money out.... a good thing for the IRS.

This idea would make it MORE profitable to make money overseas from jobs created in the US.

Without this change, I fear companies like Microsoft, Cisco, Intel, HPQ, etc. (links go to stock quotes and charts)  will use the cash to buy companies outside the US to grow even more outside the US.  If tax policy here remains punishing to job creators, I believe they will eventually leave the US for more tax friendly countries like Verigy (VRGY quote and charts) did after it spun off from Agilent/HP and moved to Singapore.  

FWIW, moving jobs overseas for better tax treatment and lower wages is nothing new.  When I started at Hewlett-Packard as a summer intern in 1978 we were in the process of moving final test of some volume products to Singapore.  By the time I left 20 years later, I was training experienced engineers from Singapore (on temporary visas) to do jobs I trained top engineering graduates from CAL, Stanford and MIT to do ten years before.   It is no accident US jobs moved to where companies can operate at a higher profit.  The US needs to look at how it can reverse the tide and bring jobs back to the US.

What do you think?  Post your thoughts in the Comments Section.

Update 12:40 PM PST:    Details are in comments section:

1.  Cisco has over $30 billion outside the U.S.  John Chambers said "Easiest way to generate jobs is to bring back the money, Implore people to do that. Of Fortune 100, we may be only one that is growing headcount in the U.S. by 10%."
2. John Chambers said  repatriation of cash, if it occurs, some will be used for job creation, some to drive up stock prices (probably via buybacks.)  Even buybacks are good for the taxpayer as they will come back to be taxed  as ordinary income when people with stock in their IRAs convert it to cash to take RMDs when they retire.

Initial Jobless Claims Up but Unadjusted Claims Were Down

The Department of Labor (DOL) reported "seasonally adjusted" (SA) weekly unemployment insurance claims increased to 576,000. This gain in initial jobless claims was not enough to change the insured unemployment rate which remained at 4.7%:

In the week ending Aug. 15, the advance figure for seasonally adjusted initial claims was 576,000, an increase of 15,000 from the previous week's revised figure of 561,000. The 4-week moving average was 570,000, an increase of 4,250 from the previous week's revised average of 565,750.

The advance seasonally adjusted insured unemployment rate was 4.7 percent for the week ending Aug. 8, unchanged from the prior week's unrevised rate of 4.7 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Aug. 8 was 6,241,000, an increase of 2,000 from the preceding week's revised level of 6,239,000. The 4-week moving average was 6,266,000, a decrease of 2,500 from the preceding week's revised average of 6,268,500.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.565 million.

The unadjusted data show initial jobless claims actually declined by 28,406. This decline wast not enough to change the unadjusted insured unemployment rate which remained at 4.6%:

The advance number of actual (NSA) initial claims under state programs, unadjusted, totaled 454,216 in the week ending Aug. 15, a decrease of 28,406 from the previous week. There were 343,169 initial claims in the comparable week in 2008.

The advance unadjusted insured unemployment rate was 4.4 percent during the week ending Aug. 8, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,798,001, a decrease of 97,650 from the preceding week. A year earlier, the rate was 2.4 percent and the volume was 3,160,610.

---

UNEMPLOYMENT INSURANCE DATA
FOR REGULAR STATE PROGRAMS

---

	Advance
WEEK ENDING	Aug. 15	Aug. 8	Change

---

Initial Claims (SA)	576,000	561,000	+15,000
Initial Claims (NSA)	454,216	482,622	-28,406
4-Wk Moving Average (SA)	570,000	565,750	+4,250

	Advance
WEEK ENDING	Aug. 8	Aug. 1	Change

---

Ins. Unemployment (SA)	6,241,000	6,239,000	+2,000
Ins. Unemployment (NSA)	5,798,001	5,895,651	-97,650
4-Wk Moving Average (SA)	6,266,000	6,268,500	-2,500

---

Ins. Unemployment Rate (SA)2	4.7%	4.7%	0.0
Ins. Unemployment Rate (NSA)2	4.4%	4.4%	0.0

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