AJSN for May Up 780,000: 19.5 Million More Jobs Could Be Quickly Absorbed

This morning’s federal employment report was like an old movie set.

The front-view numbers were decent, even good.  The economy added 217,000 jobs last month, about 85,000 more than population increase soaked up.  Seasonally adjusted unemployment held last month’s large improvement to stay at 6.3 percent.  The numbers of people jobless for 27 weeks or longer and those working part-time for economic reasons (no full-time opportunities they can find) stayed about the same at 3.4 million and 7.3 million respectively.  Labor force participation and the employment to population ratio did not get worse or set any new 35-year lows, coming in at 62.8% and 58.9%.  Those saying they did not want a job at all plunged 1.7 million, and the number of non-civilian, institutionalized, and unaccounted-for fell almost 1 million, both probably due to publicity about last month’s unemployment rate drop.  The count of officially discouraged workers, though hardly including all truly in that category, fell from 783,000 to 697,000.     

So what’s the problem?  Well, everything else.

Seasonally unadjusted unemployment rose 364,000 to 9,443,000, bringing the corresponding rate from 5.9% to 6.1%.  The number of people reporting they hadn’t looked for the past year, a statistic that should not fluctuate much month-to-month, shot up over 25% and is now almost four million.  That group could absorb almost 3.2 million jobs by itself, so it deserves more attention than it usually gets.  Overall, the American Job Shortage Number, showing how many more positions could be quickly filled, came in at just short of 19.5 million as follows:

     

These outcomes mean the AJSN gave up over three-fourths of its April improvement.  It has, though, substantially improved over the past year, down 1.3 million from May 2013’s 20.8 million.  That progress is all – actually more than all, since other numbers managed a net worsening – due to lower official joblessness. 

Overall, the new employment report simply underscores the problems we have had for years.  People returning to the workforce on good labor-market news usually find out it can’t accommodate them, and go back to their “discouraged,” “did not search,” “do not want a job,” or “unaccounted for” statuses.  Labor force participation ratchets slowly but fairly consistently down.  The shares of workers out for half a year or longer, and in positions with fewer hours than they want, improve little or not enough from excessively high levels.  There is nothing happening, or even on the horizon, either publicly or privately to fundamentally improve the jobs crisis, and we certainly can’t look to Europe, rife with Great Depression-level unemployment rates, for guidance.

So here we sit.  The turtle has almost stopped crawling.  It is true that slow and steady can win a race, but stationary won’t.