For the first time in over two years, the employment report showed a gain in jobs from the year before. In August 2010, there were 130.3 million jobs - more than the 130 million jobs in August 2009. To see the trend, review my calculations on Jobs Google Spreadsheet.
This is more optimistic than what you hear from most news reports, which compared jobs to the prior month - and showed a loss of 31,000 jobs. That loss is only because the Labor Department revised July's jobs up because new data came in. That's why I use the more reliable year-over-year comparisons.
Want more good news? Businesses added 67,000 jobs in August. That means the decline in total jobs was simply because of government layoffs. This is not a big concern because business confidence is what drives economic recovery. The government can only stimulate this confidence.
The trend in manufacturing jobs, a leading indicator, also improved as 36,000 jobs were added in August. This is ONLY 3,000 fewer jobs than the year before. It, too, should be positive in the next report. Manufacturing is a leading indicator because it produces the big-ticket items consumers put off buying in a recession. Once the economy starts to improve, these orders are the first to come back. In the last recession, manufacturing jobs started to improve before the overall job market. For the data, see Google Spreadsheet Manufacturing Jobs. (Source: BLS, Employment Situation Summary)
The unemployment rate bumped up to 9.6% because 500,000 people rejoined the labor force and started actively looking for work again. Don't be surprised to see unemployment increase at the same time jobs increase. As long as businesses are adding jobs, you don't really have to worry about a double-dip recession. For more on this, see Why Jobs and Unemployment Are Both Growing.
Unemployment is a lagging indicator because the last thing businesses do is add to payroll. Unemployment will probably remain between 9-10% for the rest of this year, even though businesses are slowing building confidence. For a history of unemployment reports since March 2007, see Unemployment Statistics History.
What This Means for You
There were 8.9 million part-time workers who would prefer full-time work. The increase in part-time and temporary workers reflects a shift towards the Freelance Economy.
Amazingly, employment improved (on a year-over-year basis) sooner than it did in the 2001 recession, which lasted 8 months, and had 29 months of year-over-year job losses. In this recession, job losses were much more severe, but improved after only 26 months. For a history of employment reports since March 2007, read Employment Statistics History.
Articles from Alison Doyle, About.com Guide to Job Searching
- How Is Unemployment Defined?
- Who's Afraid of Double-Dip Recession?
- How Can I Protect Myself from Unemployment?
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