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.