February Jobs Report: More Positions, Fewer People on Sidelines, AJSN Down to 16.7 Million Latent Demand

This morning’s Bureau of Labor Statistics Employment Situation Summary was supposed to be a critical one, for the wrong reasons.  Observers were hoping for decreasing employment and fewer new jobs, as if those things alone would reduce inflation.  They didn’t get that.

Heading the data was 311,000 net new nonfarm payroll positions, way past the published 200,000 and 215,000 estimates.  Soon after that was seasonally adjusted unemployment increasing from 3.4% to 3.6% - but wait a minute!  The cause of that can be seen in other results, especially a roughly 1 million reduction in the count of people claiming no interest in work, and a similar jump, to 159,713,000, in total employment.  Adjusted joblessness rose 200,000 to 5.9 million, showing more than anything else that not all of the people rejoining the labor force, pushing the participation rate up 0.1% to 62.5%, were finding work.  Other numbers were flat, with unadjusted unemployment still 3.9%, those out for 27 weeks or longer still 1.1 million, the employment-population ratio holding at 60.2%, the number of those working part-time for economic reasons, or keeping that sort of work while looking thus far unsuccessfully for full-time employment, remaining at 4.1 million, and average hourly private nonfarm payroll earnings up only 6 cents per hour, or when combined with last month’s result keeping approximate pace with inflation, to reach $33.09. 

The American Job Shortage Number or AJSN, the metric showing how many new positions could be quickly filled if all knew that getting one would be little more than another daily errand, fell about 264,000 to reach the following:

The share of the AJSN from those officially unemployed rose 1.0% to 35.3%.  Compared with a year before, the AJSN is down 520,000, not much over half of that from lower joblessness but 100,000 from a million reduction in the count of people off the grid and in institutions or the military.  Four other categories contributed 28,000 to 60,000 less to the AJSN than they did in February 2022.

On Covid-19 between January 16^th and February 16^th, we improved across the board.  Per the New York Times, the seven-day rolling average of new daily cases fell 36% to 37,775, the number of hospitalized figured the same way dropped 33% to 29,075, and the same for deaths was off 29% to 398.  The former pandemic continues to have no meaningful effect on decisions to work.  

Overall, where are we?  Once again, in a very strong place.  The job market has shown such power that, last month alone, a million Americans changed their minds and decided they did indeed want to work, and the marketplace metabolized about 800,000 of them.  For a country gaining only 109,000 people over the month, that’s a lot.  We have good times, with people perceiving that doing as much to continue inflation as anything else.  We’re as far from a recession as ever, there is less evidence even than in recent months that we will have one soon, and having inflation at current levels, now 6.4% annually for the past year and less for smaller lengths of time, is a minor price to pay for almost 160 million on the job and robust spending.  Once again, the turtle stretched his legs moving them well forward.