Friday, January 9, 2015

Unemployment’s Down, but December AJSN Shows America Now 18.3 Million Jobs Short

This morning’s jobs data was, once again, better than analysts expected.  The 252,000 net new positions, down from November but still strong, was more than the projected 220,000, and the headline seasonally adjusted unemployment rate, predicted to stay the same, fell from 5.8% to 5.6%.  Unadjusted joblessness was also off, from 5.5% to 5.4%. 

While the count of those wanting to work but not having looked for a year or more also went down, from 3,467,000 to 3,309,000, other employment categories were up.  Those reporting no interest in a job jumped almost 1 million to 87,294,000, meaning that even if only 5% of them would actually take employment if it were readily available, the increase in this group alone could absorb 50,000 more new positions.  Other large gainers were those discouraged, up 42,000, and the “other” unemployment category (not officially jobless and wanting to work now but not held back by discouragement, ill health or disability, family responsibilities, or school or training) rose 91,000. 

Newer data for American expatriates, 7.6 million from the Bureau of Consular Affairs instead of the previous 6.32 million from the Association of Americans Resident Overseas, added 256,000 to December’s American Job Shortage Number (AJSN), and the same number to each previous month retroactive to its May 2014 date.

In all, the December AJSN came in at 18.3 million, down almost 300,000 from November’s adjusted 18.6 million, as follows:

Compared with one year before, the AJSN has dropped almost 1.1 million, with 1,487,000 fewer jobs absorbable by those officially unemployed partially offset by gains in those not looking, those unavailable to work now, those not wanting work at all, and expatriates.

In December, the four critical secondary numbers were mostly unchanged.  The count of long-term unemployed, still officially jobless after looking 27 weeks or longer, held at 2.8 million.  Those working part-time for economic reasons, wanting a full-time opportunity but not finding it, are still at 6.8 million.  The employment to population ratio was unchanged at 59.2%.  Labor force participation, though, tied its post-1978 low of 62.7%.

Generally, these are good if unspectacular results.  Official unemployment is at a non-recession level, and for the 11th straight month the number of net new positions outstripped the population increase.  However, the improvements are all incremental, and so must carry on for many more months for the country’s overall job situation to get back to 2007 levels.  In the meantime, more people continue to leave the workforce and make other life choices, giving us no realistic reason to think that the 66% participation that year will happen again.

A permanent effect of the recession?  No, a permanent effect of the jobs crisis, which is still here, although the turtle did take a couple of steps forward last month.         

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