Another Good Month, But February’s AJSN Shows We’re Still 19.3 Million Jobs Short

The Bureau of Labor Statistics’ monthly Employment Situation Summary continued its good and remarkably steady pattern again this morning.  Seasonally adjusted net new payroll employment jumped 295,000, and the jobless rate reflecting it reached a post-recession low of 5.5%.  Average wages improved also, with an average 3 cent gain that may sound puny but in fact works out to an annual rate higher than inflation has been. 

The American Job Shortage Number or AJSN, which is not seasonally adjusted, fell about 260,000, essentially completely on lower official unemployment, as follows:

The raw number of technically unemployed declined 400,000 from January to February, meaning that latent demand for jobs from that segment fell 360,000.  The AJSN, though, did not drop that much, because the count of people in three significant smaller categories, those not searching for work in the previous year, those discouraged, and those temporarily not available to work now, were all up.  Since any seasonal bias in these figures would call for them to be lower instead of higher, as employment is generally better in February than in January, once again the job creation statistics did not tell the whole story.

The four key secondary measures were mixed.  Long-term unemployed, out 27 weeks or longer, improved by 100,000 to 2.7 million.  The count of those working part-time for economic reasons, or wanting full-time work but only finding part-time, dropped 200,000 to 6.6 million.  The employment to population ratio, which shows what percentage of Americans are working, held steady at 59.3%, but the labor force participation rate, despite official joblessness tumbling substantially, fell to 62.8%.  As well, seasonally unadjusted unemployment fell from 6.1% to 5.8%. 

Year-over-year AJSN component comparisons were much the same as between the past two months.  The AJSN is almost 1,000,000 less than it was in February 2014, but way more than that – over 1.6 million – is from the drop of people technically unemployed.  Those in other categories, in particular the count of people wanting to work but not looking for it for at least the previous year, which has jumped from about 3.22 million in February 2014 to 3.74 million last month, offset almost 40% of that improvement. 

So where are we now?   Unemployment keeps dropping, wages are doing better, and the number of new jobs is consistently more than covering the population increase.  However, although higher absolute numbers of Americans are working, the problem of people leaving the labor force remains, is not getting weaker, and will become much worse with the next recession.  Even after giving jobs to each technically unemployed person, we could, easily and quickly, fill over 10 million more.  But, to be fair, the turtle is still plodding forward.