Friday, September 7, 2018

Another Strong Jobs Month – AJSN Down 200,000 with Latent Demand for 16.6 Million More Available Positions

In this morning’s Bureau of Labor Statistics monthly Employment Situation Summary, one thing surprised me.  I had just commented that the projected number of net new nonfarm positions was usually too high, so wondered if, at 163,000, the official report would show we failed to cover our population increase. 

We did, though, easily.  The result was 201,000, about a third more than we need to sustain our growing number of adult residents.  The writeup was positive in other ways as well.  The count of those officially jobless was off 100,000 to 6.2 million, those out 27 weeks or longer fell the same amount to 1.3 million, and the total of people working part-time for economic reasons, or holding on to short hours while thus far unsuccessfully seeking full-time ones, dropped another 200,000 even after the previous month’s 100,000 loss, to 4.4 million.  Average private nonfarm payroll wages again increased more than inflation, up 10 cents per hour to $27.16. 

The headline adjusted unemployment rate did not improve, though, staying at 3.9%.  The unadjusted figure was the same, off 0.2% from July and showing August is a neutral seasonal month.  The two disappointing results were in the two figures indicating best how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, each down 0.2% to reach 62.7% and 60.3% respectively.

The American Job Shortage Number or AJSN, which gives in one number how many additional, not-currently-available positions could be filled if all knew that getting one were as easy as getting a pizza, improved 217,000, as follows:

Outside the 324,000 improvement from those officially unemployed, 70,000 from those discouraged, and 33,000 from those pleading family responsibilities, though, the components got larger.  Most noteworthy was the 2 million gain in those claiming no interest in working, a huge jump for one month, adding 100,000 to the AJSN.  Other significant worseners were the number of people in school or training and those also wanting to work but not looking for it for the past year.  The changing outcomes in these three categories show that fewer people not technically counted as jobless tested the waters in August than in July, adding up to a real labor force shrinkage.

Compared with a year before, though, the AJSN is looking great.  The August 2017 figure was 17.6 million, over one million higher, mostly due to the difference in official unemployment.  The only significant gainer since then was those not wanting a job, with cuts in those in the armed forces, institutions, and off the grid and those not looking for the previous year helping the AJSN by about 100,000 apiece.  About 34.5% of the AJSN now comes from those unemployed, down from last month’s 36.1% and continuing a general long-term trend of more and more positions being filled by others.

So how good a month was it?  Although I’m concerned about the fallen participation percentages, and the corresponding increase in people staying on the shelf, it was positive.  There is nothing small about, month after month, our employment gains exceeding the needs of our additional population, or about the key and unheralded figures of long-term jobless and working part-time for economic reasons seeming to fall almost every month.  It is, relatively speaking, a fine economic time, and we’re still improving.  Accordingly, once again, the turtle took a small but clear step forward.  

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