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Ellen Zentner, Nomura senior U.S. economist, breaks down today’s jobs data and what it means for the economic recovery.
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-- do we behind that will defend by that Alexander is here.
The midsection of -- and she joins us now to -- and what do you think we have a personal asking your impression of the this job's report because they're sort of something in it for every one.
You know the unemployment rate ticked higher but of course the jobs -- itself was better than expected what was your take.
You know I think my reaction was probably similar to the markets I saw the headline number and wait -- -- more jobs in July and then I saw the unemployment rate went cool not so good.
So the question comes down to.
What does the Fed look at what matters most of them are they gonna care that -- -- creating a ton of headline jobs here or are they gonna care more.
That the unemployment rate continues to rise I would contend that the unemployment rate is what matters more for the Fed when determining whether the economy needs more monetary easing.
Can you explain Ellen why -- side divergence if I'm interpreting it even correctly between household survey and the payrolls number.
Gallium there's a lot of confusion.
During the bed month when we get a payroll report and these two surveys don't -- so for payrolls.
-- they just surveyed businesses they say how many jobs did you have on your payroll that month.
And the business simply writes out a number and the says that's accounts.
For households it's actually a phone call that BLS calls -- and say William -- this month.
If not -- -- looking for a job and they -- all kinds of more in depth and detailed questions and so it's from the household survey.
That we calculate that unemployment rate and household survey of course diverge greatly from the payroll survey.
Households told us they lost a 195000.
Jobs this month.
Not created more than a 160 that was shown in the payroll report.
There's some measurement differences in the long run these two surveys tend to fall in line with each other.
But in months like this July report they can look wildly different and that ticked up in unemployment rate was not good news today.
Now and a lot of numbers with in the never worked great -- -- we look at the U six number which is all the people that -- discourage that ticked higher to 15%.
Looking at 23 point five million people who are under employed or unemployed.
A 155000.
People.
You know stopped looking altogether why do you think that we're seeing such -- slow recovery in jobs.
-- -- we just simply don't have enough aggregate demand in the economy businesses aren't hiring enough in order to get consumer confidence.
Get more people employed it's taking a very long time to adjust to the structural shifts in the economy after -- financial crisis.
Where many sectors have the economy has just gone away.
In lots of times after financial crisis this is the behavior that we see it's at an adjustment just takes much longer.
The normal but the longer it takes the longer people are left unemployed and the less once a -- -- -- -- What what sectors -- got away what -- -- -- got away and are never coming back.
Will construction first and foremost we're gonna have a revival in the housing market in fact in many areas of the country.
That's already happening.
But you're talking about a construction sector that's never gonna grow to be as large and it was before the housing market downturn.
The homeownership rate is just not gonna be at the rates that we saw.
During the housing market -- so that's a sector.
-- a lot of jobs have been lost and we're not gonna be able to accommodate those jobs so I that either of those workers are gonna have to get retrained to move and other -- manufacturing sectors.
Or they're just gonna be lost to the labor market altogether -- if you're here one thing that that was interesting sorry catch up.
The revisions were minimal for the prior months.
And -- it leads me to wonder if weren't nice upward trajectory here with more jobs added that we were expecting 163000.
Of course.
Do you think we'll continue to build on this here in the subsequent months.
Well I certainly hope that we continue to build on -- that there were a lot of sectors in this report that had temporary.
Boost in jobs in August for very particular reasons the auto manufacturers saw -- boost because the seasonal.
-- shut downs for retooling didn't occur when they normally do we had a ton of loss of teachers in June instead of July so we had a huge jump.
In private services education in July that normally would have happened in June.
And so there's a lot of temporary factors boosting the jobs in this report that are gonna come off in August.
So but I but I do hope that the fundamental improvement continues and we we echo your sentiment thanks Alan.
Thank you.
So we're about halfway through earnings season who are the winners and the losers a look at the scorecards and coming up.
