Two directions in the same month

According to the U.S. Bureau of Labor Statistics release, nonfarm payrolls fell 23,000, the unemployment rate slipped to 4.1 per cent and the labor force participation rate fell 0.1 percentage point to 61.4 per cent. Falling participation shrinks the denominator of the rate: someone who stops looking is not counted as unemployed. An improving headline rate and improving conditions for finding work therefore need not mean the same thing. The fall in participation could also be explained by retirement or a shift in the age structure, and one month's move is not enough to separate the two.[1]

The losses are not spread evenly either. Local government education shed 50,000 jobs, retail trade 19,000 and financial activities 14,000, while health care added 22,000. The rise of 153,000 to 921,000 in temporary layoffs describes a separate group: they are counted in the labour force because they expect to return, but they are not being paid now.[1]

What two cents describes

Private-sector average hourly earnings rose 2 cents to 37.62 dollars, 3.2 per cent higher over the year. This is an average, and the jobs that make it up can change within a month. If the losses concentrate in relatively low-paid lines such as local government education and retail, the average rises even when nobody's pay does. Median pay and a sector-level earnings breakdown would show which of the two happened.[1]

The backward revisions face the same way. May's gain was cut by 66,000 to 63,000 and June's by 37,000 to 20,000, leaving the two months 103,000 lower. For a household budget the meaning is plain: hiring ran slower than believed for two months.[1]

The same day, next door

According to Statistics Canada, which released its July data the same morning, employment rose 75,000, unemployment fell to 6.4 per cent and the employment rate rose 0.1 percentage point to 60.9 per cent. The public side behaved similarly in both countries: Canadian public administration lost 15,000 and US local government education 50,000. The divergence is in the private sector, where Canadian wholesale and retail trade added 21,000 and finance, insurance and real estate 18,000. Wages differ too; average hourly wages rose 2.8 per cent over the year in Canada and 3.2 per cent in the United States. On the same calendar day, two neighbouring labour markets mean two different sets of odds for someone who has just lost a job.[1], [2]