This morning, the jobs, population, and expatriate-count data
told us something unfavorable.
No, it’s not the net new nonfarm positions added, which,
while at 156,000 for September fell a bit short of the apparent consensus 174,000
projection. No, it’s not the commonly
publicized seasonally-adjusted unemployment rate, which rose from 4.9% to
5.0%. It’s not the number of long-term
jobless, those out 27 weeks or longer, which stayed the same at 2.0
million. And it’s certainly not the
other major statistics. Those
improved: the labor force participation
rate was up 0.1% to 62.9 percent; the employment to population ratio, the best
metric for determining how common it is for Americans to actually be working,
climbed the same amount to 59.8%; the count of people employed part-time for
economic reasons, or unsuccessfully seeking full-time labor while on the job but
for fewer hours than that, dropped 200,000, a lot for one month, to 5.9
million; unadjusted unemployment was down from 5.0% to 4.8%; and average hourly
wages went up a penny more than inflation, 6 cents, to $25.79.
It’s not even, on the surface of it, September’s American
Job Shortage Number or AJSN, which tells in one number our latent demand for
work, or how many additional positions could be quickly filled if being hired
were quick, easy, and routine. That improved
356,000, as follows:
This August to September change was nothing meaningful, as
more people are employed in the latter month.
Our cause for concern is that we are no longer improving. Finally, after about 80 months of
year-over-year gains, going back gives us a lower AJSN. Here is that one:
How did we manage to get 221,000 jobs shorter when they have
been created faster than our rising working-age population? The difference is mostly in the fifth
category from the bottom, “did not search for work in previous year.” These people, whose numbers grew 268,000 from
a year ago, say they want employment but are not looking for it. There are also more American expatriates,
some of whom would return if they thought they could be hired here, than in
September 2015. The same goes for those
in school or training and for people officially unemployed, who, though only
30,000 more numerous, at their estimated rate of 90% taking readily available
work still adds 27,000 to the difference.
What does this mean? First,
it tells us that we are not only breaking even with jobs demand, but may be
getting worse. Second, it reinforces
that our prosperity improvement is leveling off. Third, it reminds us that most people who
would work if the country had an employment supply similar to that recently in
western North Dakota are not officially jobless – in fact, they would absorb
only 39% of the new positions those in our country could now fill.
Beyond that, we’re still looking good. We’re creating jobs well. Wages, which still have reason to be held
back by the worker surplus, are hanging on.
It is particularly favorable to see the two employment ratios get
further away from post-1977 record territory.
Yet we now have no reason to think that in a year or two, times will be
better. The turtle took a small step
forward, but he might not soon have many more of those.
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