July’s Employment Report: Job Stagnation?

By at 5 August, 2022, 12:23 pm

by Raymond J. Keating –

The headline for the July employment report certainly was positive, with the establishment survey pointing to nonfarm payroll employment increasing by a robust 528,000.

As noted in the report, “Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care.”

As SBE Council has explained before, the monthly employment report actually includes jobs data from two surveys – the establishment survey and the household survey. (See this SBE Council analysis for a more complete discussion on the difference between the two.) In summary, the household survey, while more volatile from month to month, better captures small business and startup activity.

The household survey showed a more tepid employment gain of 179,000 for July. Also, the labor force actually declined by 63,000. For good measure, from March to July of this year, both the labor force and employment stagnated (actually declining slightly).

Source: Federal Reserve Bank of St. Louis, FRED

Hopefully, the establishment survey is the leader between the two surveys, and we’ll see growth return in terms of job gains in the household survey.

However, given the reality of a recession, the tax and regulatory increases being imposed and pushed by the Biden administration and Congress, and that employment tends to be a lagging indicator, it would not surprise us if the stagnation of the household data was running ahead of the payroll data.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.


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