February: A Tremendous Employment Month, With Latent Work Demand Shrinking: American Job Shortage Number (AJSN) Down to 16.8 Million

This morning, we expected a good set of Bureau of Labor Statistics employment data, but not this good. 

The publicized projection for net nonfarm payroll employment growth was 236,000, and it turned out even better – 313,000.  That, though, was only in a three-way tie for the best number.  It had to share that with each of the two measures of how common it is for Americans to actually be working.  The labor force participation rate jumped 0.3%, with 0.1% being a solid gain, to 63.0%, and the employment-population ratio did the same to reach 60.4%.  Both of these are now nowhere near last year’s lows, and are clear indications that an increasing number of people are not only avoiding official unemployment, which stayed at 4.1% adjusted and fell 0.1% to 4.4% unadjusted, but finding jobs.

The other results were mixed.  There is still an adjusted number of 6.7 million unemployed.  The count of people out for 27 weeks or longer also held, at 1.4 million.  The tally of those working part-time for economic reasons, or continuing to work at shorter-hours propositions while seeking full-time ones, however, worsened 200,000 to 5.2 million.  After last month’s 9-cent gain, which was adjusted to 7 cents, average nonfarm payroll hourly earnings were up only 4 cents, less than inflation, and are now at $26.75.   

The American Job Shortage Number or AJSN, which shows in one figure how many more positions could quickly be filled if all knew that finding work was as easy as finding a grocery store, shrank 344,000, a lot since it is not seasonally adjusted and January and February typically have similar levels of employment, as follows:

Its decrease from January was unusually broad-based, with 121,600 coming from those who wanted to work but have not looked for it for 12 months, 88,200 from lower official unemployment, 70,200 from those claiming discouraged status, and a rare fall, of 54,550, from those denying any interest in working.  The share of the AJSN from those technically jobless is now less than 38%, another post-Great-Recession low.  Its year-over-year change continued to be strongly favorable, with reductions in official unemployment, did not search, and the count of those non-civilian, institutionalized, and off the grid propelling the AJSN to a 1.07 million improvement since February 2017.  

I loved this month.  That 313,000 will get the headlines, but the bolstering of the employment-population ratio and labor force participation rate may be even more valuable.  The across-the-board shrinkage of those marginally attached, as in the statuses just mentioned, gives the job market overall strength behind its marquee numbers.  The turtle took a robust step forward.