A Dismal Employment Report, But Hope for Wichita

Unemployment Rate Up, Job Growth Nil

The Bureau of Labor Statistics issued its monthly labor report this morning.  The unemployment rate was 9.18%.  It is up for three straight months now.  The establishment survey showed only 18,000 new jobs, a number so small, it is noise.  No sensible statistician would reject the hypothesis that June's job growth was zero. May's strong job growth was even revised downward. 

The Long Slow Slide

Reviewing the data for the last year is even more depressing.  Although the establishment survey shows a growth of over a million jobs since June, 2010, the household survey shows only about a quarter million more working now than then.  That is a big discrepancy and bodes ill for the next big establishment data revision.  More depressing still is the trend in the ratios of jobs to the population.  This statistic is immune from oddities in Washington's population estimates.  The proportion of the population working appeared to have bottomed out in January, 2010 at 58.23, but now hit a new low in June, 2011 at 58.18%.  

The unemployment rate peaked at 10.15% in October 2009.  The bulk of the improvement since then came from a fall in the number looking for work (i.e., a fall in the labor participation rate.)  The economic distortions caused by the credit boom of the middle of the last decade continue to drag on growth.   Housing starts have averaged a little over a half million for more than two and a half years.  Unemployment in construction is at 15.6% despite a slowly shrinking labor force.  Conventional economic stimulus is poorly equipped to cure such distortions.

But Is Aerospace Up!

Amid all this gloom, there is good news for Wichita.  Manufacturing employment is up nationally.  Moreover manufacturing jobs are up about a percent and a half over a year ago.  

Digging under the published numbers in the BLS report, it appears aerospace employment is up by a thousand jobs in June.  This comes after a great Paris air show for commercial aviation.  Over $90 billion in orders were placed for new planes.  This is good news for Spirit.  Even general aviation is showing glimmers of life.