This time ADP (said 163k jobs added) had it right as July private sector payrolls gained 172k with the headline figure up 163k. The previous two months were revised down by a net 6k. The household survey though showed a decline of 195k jobs and more than offset the 150k drop in the size of the labor force and it’s why the unemployment rate ticked up to 8.3% from 8.2%. The U6 rate rose to 15% from 14.9%. Avg hourly earnings were up by just a .1% m/o/m and 1.7% y/o/y, barely tracking inflation. The Avg workweek was unchanged. The participation rate did fall to 63.7% from 63.8% but the avg duration of unemployment fell to 38.8 weeks, the lowest since April ’11. Mfr’g added 25k jobs, 15k more than expected. Construction fell by 1k. Services added the balance of 148k. Gov’t at all levels shed jobs. Bottom line, as measured by the payroll survey, the job creation in July was encouraging in light of the growing signs of economic slowdown but wasn’t equally matched by the very volatile household survey which fell and was the main factor in the rise in the unemployment rate. In terms of impacting Fed policy, this data point will unlikely affect their desire to do more in Sept if the economy doesn’t get any better from here.
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