According to the Bureau of Labor Statistics, the United States gained 223,000 jobs last month, and official seasonally-adjusted unemployment reached a new post-Great Recession low of 5.3%. At first glance, it was another solid performance. But was it really? Three numbers say it wasn’t.
The first was the labor force participation rate, which came in at 62.6%, diving 0.3% and dropping out of its 14-month range for its lowest outcome since October 1977. The second was the other figure showing how common it is for Americans to work, the employment-to-population ratio. That fell 0.1%, matching what it was from January through April, and is now threatening to leave its own recent range. The third disturbing number was average hourly earnings for private nonfarm workers. That did not increase at all, wiping out May’s good performance and casting serious doubt on whether the labor market is actually tightening.
The American Job Shortage Number, or AJSN, rose not only from higher seasonal unemployment (more people consistently work in May than in June), but because the count of those wanting jobs but not searching for a year or more was up 172,000, and there were 90,000 more discouraged workers. Overall, the AJSN came in as follows:
Compared with a year before, the AJSN is 1.1 million lower, completely on reduced unadjusted joblessness. The largest offset was the 5% of those saying they did not want to work at all, who add up to about 1.7 million more than in June 2015.
Other secondary numbers generally improved, one dramatically. The count of long-term unemployed, or those without jobs and looking for 27 weeks or longer, plunged almost 400,000 to 2.1 million, by far the lowest since the recession. Those working part-time for economic reasons were at 6,500,000, or 100,000 lower since April. The unadjusted unemployment rate increased, mostly seasonally, from 5.3% to 5.5%.
On balance, I call June’s jobs data reasonable. It’s far from great, and much of its perceived improvement, once again, comes from people leaving the labor force. When a lower share of Americans are in jobs or officially unemployed than any time since Reggie Jackson hit three home runs in a World Series game, we can’t say our country is even close to getting back to work. When wages go nowhere at all, we can’t say that demand for workers is truly rising. These problems are still totally unsolved. The turtle took a step forward last month, but that’s all.