Friday, August 5, 2016

July Had Peaceful and Positive Jobs Data, but the AJSN Shows America Is Now Up To 18.4 Million Jobs Short

This morning’s Bureau of Labor Statistics July employment report could be called boring, but that might sound too derogatory.  It was encouraging, as we added 255,000 net new nonfarm positions, well over the 180,000 consensus projection and about double what our population increase absorbs, which was not offset by significant worsening elsewhere.  Both seasonally adjusted and unadjusted employment rates stayed the same, at 4.9% and 5.1% respectively, the spreads showing that the number of people working in July is not only typically much the same as in June, but is below the annual average.  The two measures best showing how common is it for Americans to be working, the employment-population ratio and the labor force participation rate, both improved 0.1% – their outcomes of 59.7% and 62.8% are now the same as they were in April and are no longer immediately threatening new 40-year lows.  The count of people working part-time for economic reasons, or holding on to short-hours employment while seeking and not finding full-time opportunities, was, with a gain of 100,000 to 5.9 million, the only major front-line figure to go downhill, whereas the number of long-term jobless held at 2.0 million.  Average hourly earnings rose a more-than-inflation 8 cents per hour to $25.69.

The worst outcomes were in the counts of people marginally attached to the labor force, or neither employed nor officially unemployed.  While there were almost half a million fewer claiming no interest whatever in working, those reporting they wanted jobs but had not looked for one in the previous year rose 175,000 to 3.713 million, and those in the “discouraged” category increased 89,000 to 591,000.  The people in these two categories could now absorb 3.5 million work opportunities, growing in comparison with the 7.4 million for those technically jobless.  Overall, the American Job Shortage Number or AJSN, showing in one figure how many positions could be quickly absorbed if getting one were as easy as getting a pizza, increased 255,000, as follows:

The share of latent demand for jobs coming from those officially unemployed, or, as above, 7,440,300 divided by 18,402,179, remained at 40%.  

The year-over-year AJSN comparisons still show improvement but continue to shrink, with a drop of only 531,000 since July 2015, of which over 90% was due to lower official joblessness.  The count of those not wanting work at all continues to rise, but those in most other marginal attachment categories have diminished, slightly, over the past year.  

So how good a month was it really?  I think it was fine, if unspectacular.  We continue to reach new post-recession improvements, with unemployment rates low and indications of likelihood to work at least pausing.  In the context of a permanent jobs crisis, these are good times.  The turtle, again, took a modest but unmistakable step forward.  

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