Friday, May 2, 2014

The Best Jobs Data in Years, But America Still 18.7 Million Jobs Short

April was the quietest month on employment commentary since I started issuing the American Job Shortage Number, or AJSN, almost two years ago.  One reason for that became dramatically clear this morning, as the Bureau of Labor Statistics employment and unemployment report was the most favorable we have seen during this time and way before.  The turtle I referred to last time ran like a rabbit.

The American economy added 288,000 net new jobs, and unemployment went way down.  Not only did the headline seasonally adjusted rate drop to 6.3%, lowest since November 2008 when it was early in the Great Recession, but the unadjusted share, now 5.9%, has shown similar improvement.  As a result, we would also have to go back to 2008 to find an AJSN lower than the current 18.7 million, calculated as follows:    

In only a month, the AJSN has dropped more than one million, and, compared with a year ago, fallen 300,000 more than that.  In April 2013 there were over 1.9 million more unemployed, and fewer in most other categories above, but over 3.7 million more now have unknown status, and 2.4 million more say they don’t want to work at all. 

Several factors, though, do constitute a cloud around this silver lining.  First, counts of the marginally attached categories, specifically those discouraged, in school or training, have not looked for at least a year, and want work but are not available now, were generally up.  Second, labor force participation, down, tied December’s 62.8% for the lowest since March 1978, meaning that the number of people deciding not to pursue jobs at all continues to rise.  That explained why unemployment dropped by 445,000 more than the number of new positions.  (The employment-to-population ratio stayed at 58.9%, still low but with some breathing room above its post-1983 low of 58.2%.)  Indeed, the absolute number in the labor force fell 806,000 last month.  Third, the number of people working part-time for economic reasons did not improve, and is still at a historically high 7.5 million.  Last, as has been widely re-reported this past week, a high percentage of the jobs created over the past five years have been low-paying. 

In all, though, April was a superb month for United States employment.  That may or may not allow Democrats to push through legislation raising the minimum wage, but in any event jobs are paying less than they did in the last decade.  While many will say America is now going back to work, a statement truer than at any other time in Obama’s presidency, the jobs Americans increasingly have are not as good.  Even if the good employment numbers continue, that is one thing that won’t improve, and we must continue to adjust to that.      


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