US July 2020 non-farm payrolls data
- Prior was +4800K (revised to 4791K)
- Two month net revision +17K
- Change in private payrolls +1462K vs +1200K expected
- Change in manufacturing payrolls +26K vs +255K expected
- Unemployment rate 10.2% vs 10.6% expected
- Adjusted for misclassification 11.1%
- Prior unemployment rate 11.1%
- Participation rate 61.4% vs 61.8% expected
- Prior participation rate 61.5%
- Underemployment rate 16.5% vs 18.0% prior
- Average hourly earnings +0.2% m/m vs -0.5% expected
- Average hourly earnings +4.8%% y/y vs +4.2% expected
- Average weekly hours 34.5 vs 34.4 expected
- Employment in the household survey +1.4m
- Part time jobs +803K
- Full time jobs little changed
- Full report
I noted before the report that a seasonal adjustment quirk was likely to add nearly 1m jobs to payrolls. It only added 245K jobs. From the BLS:
Government employment rose by 301,000 in July but is 1.1 million below its February level. Typically, public-sector education employment declines in July (before seasonal adjustment). However, employment declines occurred earlier than usual this year due to the pandemic, resulting in unusually large July increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment.
However it was even stronger than that and the majority of it was in private payrolls. The unemployment rate was also better but you can discount most of that because of a dip in participation rather than the rise expected.
Looking at the US and Canadian jobs data together, one thing that caught my attention is the growing gap in labor force participation. The Canadian participation rate now 1.2 pp below Feb levels while US 1.9 pp lower. I would have expected it the other way around with more of Canada shut in July. That will be something to watch in the months ahead.
