November AJSN: Unemployment is Down – but Latent Demand for Jobs is Up

The official unemployment rate dropped again, from 7.9% to 7.7%.  But does that mean fewer Americans would work if they had the chance?  No. 

The American Job Shortage Number (AJSN), the definitive measure of underlying job demand in the United States, shows that the number wanting to work increased 41,000 in November.   The AJSN, rounded, is unchanged at 20.6 million, as follows:

 

AJSN - NOVEMBER 2012	Total	Latent Demand %	Latent Demand Total
Unemployed	11,404,000	90	10,263,600
Discouraged	979,000	90	881,100
Family Responsibilities	206,000	30	61,800
In School or Training	345,000	50	172,500
Ill Health or Disability	174,000	10	17,400
Other	801,000	30	240,300
Did Not Search for Work In  Previous Year	3,347,000	80	2,677,600
Not Available to Work Now	643,000	30	192,900
Do Not Want a Job	82,726,000	5	4,136,300
Non-Civilian and Institutionalized, 15+	6,949,396	10	694,940
American Expatriates	6,320,000	20	1,264,000
TOTAL			20,602,440

Consistent with the fall in the official rate, the number of unemployed (the AJSN is not seasonally adjusted) dropped from 11,741,000 to 11,404,000, or 337,000.  The less publicized numbers, though, more than offset that improvement.  Those who left the technically unemployed category for not looking for work over the past year rose 117,000, those describing themselves as “discouraged” jumped 166,000, and those still jobless but not available to work now, shot up from 475,000 to 643,000.  These three increases, in percentage terms, were 3.4%, 20.4%, and 35.4% - they are only monthly changes.  America now has more, not fewer, people wanting to work. 

Other indicators were unimproved.  Per the BLS news release, there are still about 4.8 million unemployed for 27 weeks or more, those working part-time for economic reasons stayed at 8.2 million, and the labor force participation rate, which had increased to 63.8% in October, gave up that gain, returning to 63.6%.  The actual number of Americans working, not seasonally adjusted, dropped almost half a million. 

These are not good numbers.  It is true that Superstorm Sandy had a real effect on some of them, but not in the rise of people becoming discouraged, not looking for work, or suddenly ruling themselves unavailable.   The jobs crisis made no progress in November.  Perhaps, with the election over, all can admit that, and we can look for some real solutions.