February: Another Fine Jobs Month, but AJSN Says America’s Still 18.2 Million Jobs Short

According to at least one story issued late last night, our stock market was hoping for a “Goldilocks” jobs report.  That means not too bad (giving bad tidings of the economy in general) or too good (to egg on the Federal Reserve to raise interest rates again), but “just right.” 

This morning’s data, I’m afraid, may have been too good.  Net new nonfarm jobs came in at 242,000, way over the 200,000 consensus projection.  Official seasonally adjusted unemployment held at 4.9%, but more people are working, as shown by labor force participation and the employment-population ratio each up 0.2%, a lot for one month, to 62.9% and 59.8%.  On the bad side, those officially jobless for 27 weeks or longer ticked up 100,000 to 2.2 million, those wanting work but not looking for it during the previous year rose more than that to 3.626 million, and average hourly earnings gave up 4 cents of January’s 12-cent gain to reach $25.35.  Unadjusted unemployment was down 0.1% to 5.2%.  Those working part-time for economic reasons, unsuccessfully seeking a full-time opportunity, stayed at 6.0 million.  The number of people in every single other one of the unattached and marginally attached labor categories, even those claiming no interest whatever in working, dropped from January to February.  Overall, the American Job Shortage Number, which indicates the total latent demand for work opportunities, fell 188,000, as follows:

Given the positive data above that may seem like a weak improvement, but the number of officially unemployed Americans fell only 90,000, which, when translated into the number of jobs they would absorb if work were readily available, was more than offset by the gain in those not searching for it for a year or more. 

Compared with a year before, the AJSN, which is not seasonally adjusted, improved over 1.1 million, 788,000 from the drop in officially jobless.  Most of the categories of marginal attachment were off as well, most notably the count of discouraged workers, which fell from 732,000 to 599,000.

So how much better are we off than in January?  Given not only the strong number of new jobs, but, more importantly, the large improvements in labor force participation and employment to population, we are considerably.  It is a good sign as well when the count of people claiming no interest in work declines, which it did by over half a million, as many reconsider that when perceptions of more opportunities reach them.  We have established a strong pattern of monthly job growth above the 125,000 to 140,000 needed to cover population increases, and the participation ratios are well away from last fall’s recent records.  

Average wages are not really doing anything more than inflation, but there are still too many would-be workers for sustained improvement there.  Overall, while the turtle is still a turtle, he stretched his legs quite a bit, by his standards, last month.