Economist Says No Actual Job Growth in July
Ball State's Hicks says statistical revisions mask lack of jobs being created
The government's numbers say the U.S. created 163,000 jobs in the month of July, but an economist from Ball State says there is just as good a chance the country created no jobs or may have even lost jobs.
163,000 may sound like a large number, especially compared to previous months. But jobs numbers put out by the government are adjusted seasonally by economists with the Department of Labor. This is done to eliminate recurring fluctuations, such as part-time workers hired for the Holidays losing their jobs in January or teachers going on summer break. "We're looking at a real big, once in a lifetime shift in the way seasonal employment has occurred since the end of this recession, becase we're not seeing a big uptick in construction jobs," said Ball State University economist Mike Hicks.
One of the largest seasonal adjustments, outside the holidays, occurs in the month of July every year. Hicks says this year's seasonal adjustment added more than 400,000 jobs to the reported number of jobs created, which means the actual number of jobs counted by the Labor Department went down, not up last month.
Regardless of the actual number of jobs created or lost, Hicks says the numbers have been statistically insignificant for most months since the end of the recession three years ago, and that July was no different. "We need to be creating somewhere between 450- and 550-thousand new jobs a month for us to be pushing this unemployment rate downward, and we're not doing that," Hicks said.
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