As of July 8th,2011

Employment Situation

Released on 7/8/2011 8:30: Prior Consen ActualNonfarm Payrolls -

00 AM For Jun, 2011 sus Consensus Rang

M/M change 54,000 105,000 65,000 to 160,000 18,000 Unemployment Rate Level 9.1 % 9.0 % 9.0 % to 9.2 % 9.2 % Average Hourly Earnings M/M ch 0.3 % 0.2 % 0.1 % to 0.2 % 0.0 % Av Workweek - All Employees hrs Private Payrolls - M/M change 83,000 125,000 100,000 to 183,000 57,000

Highlights
Today's employment report is abysmal. We have had two months in a row of essentially no growth. Nonfarm payroll employment in June slowed to a crawl with an 18,000 gain, following a revised 25,000 rise in May, and revised 217,000 in April. The market median forecast was for a 105,000 boost. Also, the April and May revisions were down net 44,000. Once again, the government sector held down payroll numbers as private nonfarm payrolls outpaced the total with an increase of 57,000 in June, following a 73,000 advance in May. Analysts had projected a 125,000 gain in June.

Most major industries were little changed. Goods-producing jobs edged up 4,000, following a 3,000 rise in May. Manufacturing jobs rebounded 6,000 after a 2,000 dip in May. However, construction declined 9,000 after decreasing 4,000. Mining advanced 8,000, following 9,000 gain the prior month.

Growth in private service-providing jobs slowed to a rise of 53,000 after a 70,000 increase the prior month. Leading the increase in June was leisure & hospitality, up 34,000 with professional & technical services, up 24,000. Health care continued to trend upward with a 14,000 boost. On the downside, standouts were educational services, down 17,400; financial activities, down 15,000; and temp help, down 12,000.

The government sector shed another 39,000, following a 48,000 drop in May. This latest decrease was led by local government but declines were also seen at state and federal levels. Average hourly earnings also slowed June, coming in at no change, following a 0.3 percent rise the prior month. The consensus forecast was for a 0.2 percent increase. The average workweek for all workers in June slipped to 34.3 hours from 34.4 the month before. The June figure came in lower than the market projection for 34.4 hours. On a year-ago basis, overall payroll jobs in June improved to a still soft 0.8 percent from 0.6 percent the previous month. From the household survey, the unemployment rate edged up to 9.2 percent from 9.1 percent in May. The consensus expected 9.0 percent. The June jobs report reinvigorates the argument that the economy is in a soft patch. While a number of indicators have picked up strength, employment is key for the consumer sector to add to economic growth. On the news, equity futures dipped significantly, bond prices firmed, and crude oil declined.

Market Consensus Before Announcement

Nonfarm payroll employment in May grew a modest 54,000, following a revised 232,000 jump in April and a 194,000 increase in March. Sluggishness in payroll jobs was broad based. Private nonfarm payrolls advanced 83,000 in May, following a 251,000 increase in April. Government jobs contracted 29,000, following a 19,000 dip in April. This latest decrease was largely local government, led down by local government education. On a positive note, wage growth improved in May as average hourly earnings rose 0.3 percent, following a 0.1 percent uptick in April. The average workweek for all workers in May held steady at 34.4 hours. Turning to the household survey, the unemployment rate nudged up to 9.1 percent from 9.0 percent in April. Household employment actually rose 105,000 for the month but was outpaced by a 272,000 gain in the labor force.

Definition
The employment situation is a set of labor market indicators based on two separate surveys in this one report. Based on the Household Survey, the unemployment rate measures the number of unemployed as a percentage of the labor force. Other key series come from the Establishment Survey (of business establishments). Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls.

During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month.

The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy.

As of July 7th,2011

Released on 7/7/2011 8:30: 00 AM For wk7/2, 2011 Prior Range ActualNew Claims Level 428 K 420 K 405K to 435K 418 4-week Moving Average - Level 426.75 K 424.75 K
Jobless Claims
Highlights

Continuing claims for the June 25 week fell 43,000 to 3.681 million. Continuing claims have been yet, over the last several weeks, shows little change from levels in June slowly trending lower with the four-week average of 3.705 million down about 20,000 from the monthago comparison. The unemployment rate for insured workers is down one tenth to 2.9 percent.

Incremental improvement is the conclusion for weekly claims data, headlined by a 14,000 decline for initial claims in the July 2 week to 418,000. The improvement is offset slightly by an upward revision of 4,000 in the prior week to 432,000. Results for an unusually large number of six states had to be estimated due to the July 4 holiday while Minnesota shows a 2,500 rise related to the state's government shutdown. The four-week average is down 3,000 to 424,750 .

Initial claims have been steady at a stubbornly high level above 400,000 which doesn't point to robust results for tomorrow's employment report. Yet this report is a slight positive for the economic outlook and also helps to confirm strength in today's ADP report.

Market Consensus Before Announcement

Initial jobless claims for the June 25 week nudged down only 1,000 to 428,000. The four-week average, up 500 in the week to 426,750, showed no change from the May 28 week. Definition

New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility.

Weekly series fluctuate more dramatically than monthly series even when the series are adjusted for seasonal variation. The 4-week moving average gives a better perspective on the underlying trend.

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June 3rd, 2011

June 3rd, 2011

June 3rd, 2011

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