Adriana Kugler

The employment report released on August 7 brought the risk I described in this space into much sharper focus. Payrolls fell by 23,000 in July. In absolute terms, that is a modest decline, and the Bureau of Labor Statistics rightly characterized it as little changed. But the revisions that came with the report matter more than the headline. May was marked down from 129,000 to 63,000, and June from 57,000 to 20,000. Together, those revisions removed 103,000 jobs from what we thought we knew about late spring and early summer. Over the past 12 months, payroll growth has averaged just 34,000 per month. The unemployment rate stood at 4.1 percent, essentially unchanged. On its own, a rate that low would ordinarily be reassuring. The difficulty is that it is being sustained by a labor market where very little is happening. In fact, the average number of people leaving the labor force over the past two years has reached 3.3 million per month, with about half leaving due to job-search burnout...