Economy · August 4, 2022

Calculated Risk: July Employment Preview

from Active calculated risk 04/08/2022 11:01:00

On Friday at 8:30 am ET, the BLS will release the employment report for July. The consensus is for 250,000 added jobs and the unemployment rate unchanged at 3.6%.

In June, 372,000 jobs were added and the unemployment rate was 3.6%.Employment recessions, graph of the scariest jobsClick on the graphic to enlarge the image.

• First, they are currently still there about 500 thousand fewer jobs compared to February 2020 (the month before the pandemic).

This graph shows the loss of jobs since the beginning of the employment recession, in percentage terms.

The current employment recession was by far the worst recession since World War II in percentage terms. However, the current employment recession, 28 months after it started, has recovered more rapidly than the previous two recessions.

ADP report: The ADP employment report has been “paused” and is undergoing reorganization.

ISM investigations: Note that ISM services are indices of diffusion based on the number of companies hiring (not the number of hires). The ISM® manufacturing employment index fell to 49.9% in July, from 47.3% last month. This would suggest around 20,000 lost jobs in the manufacturing sector.

The ISM® Services Occupancy Index increased in July to 49.1%, from 47.4% last month. This would suggest that employment in services was increased by around 50,000 in July.

Together, ISM polls only suggest 30,000 jobs added in July.

Claim unemployment benefits: The weekly claims report showed an increase in the number of initial unemployment claims during the reporting week (including the 12th of the month) from 233,000 in June to 261,000 in July. This would usually suggest a few more layoffs in June than in May. Overall, weekly requests were above expectations in July.

COVID: As for the pandemic, the number of the daily cases during the reference week of June were approximately 125,000compared to 105,000 in June.

Conclusion: The consensus is that employment growth slows to 250,000 added jobs in July. Overall, ISM surveys have improved but still suggested adding fewer jobs in July. Unemployment claims increased during the reporting week. This suggests a weaker-than-expected employment report for July.