By Juli Morris on July 2, 2009 in BLS Nonfarm Employment.

Employment fell by 467,000 jobs in June, according to today's preliminary report from the Bureau of Labor Statistics. June's job losses were significantly higher than the 345,000 loss reported for May, a number than many questioned. The economy has now shed nearly 6.5 million jobs since the start of the recession in December 2007.

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The WANTED forecast of a loss of -260,000 jobs in June was clearly not pessimistic enough. This is the second month in a row when our forecast based on Hiring Demand missed the number released by the BLS by a larger than acceptable margin.

That range of error prompts us here internally to re-examine the model we use to see if it needs re-calibration. The Hiring Demand data has only been in use for the last five months, so there are likely some refinements still required. Our thinking at the moment is as follows:

• The number that the BLS reported for May, which surprised everyone, still looks like an anomaly. We don't want to say that number is "wrong", but it certainly falls outside the trend (the blue line in the chart) established by the prior months. Our model happens to rely heavily on the prior month data, so this particularly unusual May data point had a disproportionate effect on our forecast for June.
• We think we have some additional analysis to perform on the seasonal adjustments to our Hiring Demand data. These adjustments should be reflected in our forecast next month.

Along with the preliminary report for June, the BLS issued its Final Estimate of job losses for April at a loss of 519,000 jobs, down 15,000 from its revised estimate of -504,000. It also revised its May preliminary estimate up 23,000 jobs to a estimated loss of 322,000 jobs. One more revision for May could still occur.

Looking at industry employment figures, health care employment grew by 20,800 in June. Employment in transportation and warehousing declined by 13,900 in June, and the finance and insurance sector lost 18,200 jobs.

The unemployment rate rose from 9.4 to 9.5 percent—the highest rate seen since August 1983 —and slightly lower than the Bloomberg Survey estimate of 9.6 percent.

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