Beyond the unchanged 5.1% marquee jobless rate, a lot happened in September.
On the good side, unadjusted unemployment hit an almost eight-year low at 4.9%. The economy added 142,000 net new jobs, the lowest since March but still a bit more than our increasing population needs. The number of people working part-time for economic reasons, or wanting full-time positions while holding ones less than that, plunged 447,000 to 6.0 million, best since the Great Recession. Those officially jobless for 27 weeks or longer also fell, down 100,000 to 2.1 million. The American Job Shortage Number or AJSN, showing how many new positions America could absorb if they were readily available, hit another post-2008 low, down 666,000 to 17.4 million, as follows:
What was not so rosy about last month? Well, everything else. The two best indicators of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, plummeted 0.2% apiece, to 62.6% and 59.2%. Understand that as little as that sounds, for numbers which move as slowly as these, anything more than one tenth of a percent in one month is a lot. The employment-population ratio is higher than it was half a year ago, but that is due to the drop in official joblessness, and is hardly good by historic standards – it was at least 60% each month for the 24 years ending February 2009. Labor force participation reached another post-Reggie-Jackson (October 1977) low, to about the same as when only half of United States women were there. That was also reflected in the number of people reporting they did not want a job at all, which gusted up from less than 87.8 million to over 89.1 million, another all-time high. Adding the other employment statuses gets us now to 94.7 million Americans neither working nor technically jobless. That is why over 60% of our job shortage would be covered by those not in the 5.1 percent we heard about this morning.
Compared with a year before, the AJSN dropped almost 1.3 million. Yet all but 89,000 of that was due to lower official unemployment, and conceals the growing effect of those claiming no interest in work, who added up to 2.6 million more than in September 2014.
Another failure was in average hourly earnings, which did not budge from August, and, with adjustments and rounding, may have actually fell. That, in relation to inflation, nearly neutralized August’s 4% annual gain. That alone should end serious speculation, based too much on that 5.1 percent, that the labor market is getting tight.
Overall, even though we are in the seventh year since the last recession, the footfall of people walking away from pursuing work continues to be louder than that from those finding jobs, with September standing as an extreme example. That, not large numbers of new positions or even an improved economy, is the story behind the 5.1%. For now, the turtle is stationary.