The Employment Situation, July 2012

The Bureau of Labor Statistics reports in the employment situation report for July that nonfarm payrolls increased by a better than expected 163k. June’s figure was 80k, so this gain is not insignificant.This is a pretty good print and will be a key factor in the Federal Reserve’s potential future quantitative easing.

The unemployment rate (U-3) however rose to 8.3% from 8.2% despite the gain in payrolls, and the broader real unemployment rate (U-6) rose to 15.0% from 14.9%.

Recently the unemployment rate figures have seen improvements due to many of the unemployed retiring and the labor force participation rate continuing to drop. The labor force participation rate is now at 63.7%, down from 63.8% in June. This brings the employment-population ratio down to 58.4%, from 58.6% in June.