Odd and Choppy Jobs Report on December’s Data, with AJSN, Showing Higher Latent Demand, Up 1,500,000 to 17.8 Million

This morning’s Bureau of Labor Statistics Employment Situation Summary was expected to be “strange” – and it was. 

There was ostensible good news in several places, most believably with the 467,000 net new nonfarm payroll positions, almost double the only projection, 245,000, I saw.  From there, though, the data was distorted by the almost vertical Covid-case graph and battered by various year-end adjustments.  Reported were 4.0% seasonally adjusted unemployment instead of 3.9%, 4.4% unadjusted instead of 3.7%, 6.5 million unemployed replacing 6.3 million, 959,000 on temporary layoff instead of 812,000, 1.7 million out 27 weeks or longer replacing 2.0 million, and 3.7 million working part-time for economic reasons, or keeping that sort of position while so far unsuccessfully seeking full-time employment, instead of 3.9 million.  The two numbers showing how common it is for people to be working or officially jobless, the labor force participation rate and the employment-population ratio, now stand at 63.2% and 59.7%, compared with December’s 62.9% and 59.5%.  Average private nonfarm payroll earnings went up from $31.31 to $31.62, including a correction but still almost double the inflation rate. 

The American Job Shortage Number or AJSN, the metric showing how many new positions could be quickly filled if all knew they were easy to get, jumped 1,479,000 to the following:

Several of the factors changed substantially.  The State Department issued a new estimate of the number of American expatriates, which was 1.3 million higher than the most recent previous one I had, issued 4 ½ years ago by the Association of Americans Resident Overseas.  Although the 16^th-of-the-month population estimate from the United States Census Bureau changed little from the previous, other differences in counting affected the number of non-civilian, institutionalized, and unaccounted, which came in at over one million less.  The largest gap between December and January, though, was from the number of officially unemployed, with those wanting to work but not looking for it for a year or more adding another quarter-million.  Accordingly, the share of the AJSN from unemployment increased 3.6%, and is now at 36.4%.   

Compared with January 2021, which was also higher than its previous month, the AJSN is down almost four million, 3.3 of that from official unemployment and enough to cover the rest from a lower number of those not looking for 12 months or longer.

As expected, the difference in pandemic statistics between mid-December and mid-January was gigantic.  Per The New York Times, the seven-day average of Covid cases, reflecting almost the very peak of the Omicron variant, shot up 555% from 122,368 to 801,903.  Deaths, using the same measure, were up 53% from 1,302 to 1,991, while pandemic-caused hospitalizations soared 127% from 68,222 to 154,698.  The 7-day average of vaccinations given, no doubt reflecting limits on the number of willing uninoculated Americans, fell 40% from 1,799,583 to 1,080,493.  The first three of these outcomes are almost guaranteed to be vastly improved next month.

What can we do with this dog’s breakfast of a jobs report?  Not much.  It’s great that we added so many positions, even with Omicron making a mess.  Beyond that, the numbers defy interpretation at best and are almost nonsensical at worst.  We will need to see February’s report, which should be directly comparable to this one, to judge where we are going.  The turtle picked up his foot, closed his eyes, and put it down somewhere, and forward, backward, or the same not even he knows.