Yesterday morning’s Bureau of Labor Statistics data release was a good one. The headline seasonally adjusted official unemployment rate reached another post-recession low of 5.0%, and the economy added another 271,000 jobs, about double that needed to cover population increase. The count of those without work for 27 weeks or longer and still qualifying as jobless held its September improvement and it still at 2.1 million, whereas that of people working part-time for economic reasons, or employed less than full-time while wanting that status, amazingly shed another 269,000 and is at 5.8 million, down from 6.5 million just two months before. The unadjusted unemployment rate also dropped 0.1%, to 4.8%.
The two best measures of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, stayed the same and increased 0.1 percent respectively and are now at 62.4% and 59.3%. The first of those two numbers is still at the post-1977 low it reached last month, whereas the second, while still small by the standards of the past few decades, continues to be helped by lower official joblessness.
Average private nonfarm hourly earnings, which had actually decreased in September, gained 9 cents per hour last month. They are now at $25.20, with the October gain reflecting a strong 4.3% annual rate. That number is up a more-than-inflation 2.5% so far in 2015.
However, despite the solidly positive results above, latent demand for jobs actually increased last month. That was because the number of people reporting that they wanted to work but had not looked for it in the previous year was up 131,000, which more than offset the 31,000 drop in official unemployment. In addition, those counted as discouraged from looking, who below are credited with the same probability of taking employment as the technically jobless, rose 30,000. On the other side, the total of those claiming no interest in working, which is rising more consistently than any other group but fluctuates a remarkable amount from month to month, was off over 600,000, cutting latent demand by over 30,000. Overall, the American Job Shortage Number, which shows how many additional jobs could be quickly filled if they were readily available, gained 66,000 as follows:
What is noteworthy about the AJSN this month? Two related things. First, although October’s employment data was legitimately positive in not only specific but broad-based ways, our national job shortage worsened. Second, although many people think of new jobs going to the jobless, more and more latent demand for them comes from people with other working statuses. Of the almost 17.5 million more positions that could be absorbed quickly, only 6,837,000 would go to the officially unemployed. That 39.1% share shows how many people not in that group want to work, and their numbers are not shrinking at all.
So where are we now? The pattern of the past several years, dropping official unemployment showing less and less of the American job shortage, continued in October. While there were slightly more work positions across the population, the share of people in the labor force did not rebound from September’s fall, and is poised to set another low in November or December. But fair is fair, and the turtle did, indeed, take a step forward last month.