–Earnings Dn, Hours Gain, Implying Soft Production & Income

By Joseph Plocek

WASHINGTON (MNI) – The U.S. June employment report confirms further
deceleration in the economy despite a false signal from ADP data.
Whether July is turning higher is anyone’s guess at this point, but even
the optimists will be hard-pressed to argue a higher growth case given
that most data in this report show the labor market is in a dire

June payrolls printed +18,000 and May-April revisions totaled
-44,000. The unemployment rate rise another 0.1 point to 9.2%, a high
since Dec. 2010 and a confirming signal that the labor market is weak.

Fall 2010 was the last time the unemployment rate was rising
three months in a row, and that was a period of go-slow growth. This
month’s rise in unemployment centered in adult men and teens and came
despite a drop in labor force.

Total Private Average Hourly Earnings fell 1 cent to +1.9% over the
year in another weak sign. But aggregate hours steadied, implying
merely slow incomes and production.

Government printed -39,000 jobs, so private payrolls posted
+57,000–its worst since May 2010 at +48,000.

Payroll composition included: manufacturing +6,000, construction
-9,000, mining +8,000, retail +5,200, finance -15,000, leisure
+34,000, healthcare +13,500, and temporary help -12,000.

This was a dismal data set. The average gain in payrolls in Q2 was
just +87,000. Unadjusted payrolls were +376,000 in June, small
consolation for the overall weakness.

Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Jun +18k —- +1.89% 100.8 9.2% (9.1819%)
May +25k +54k +2.10% 100.7r 9.1% (9.0531%)
Apr +217k +232k +2.05% 100.7 9.0% (8.9603%)

** Market News International Washington Bureau: (202) 371-2121 **