AJSN: America Reaches Post-Recession Low Job Shortage, Though Still 17.9 Million

I saw two almost conflicting pieces of speculation about the American employment situation this week.  The first was that we might be in a recession, since the economy shrunk last quarter.  The second was a New York Times view that net new jobs created might go back to the mid-200,000’s, where it’s been for most of the past year.  We don’t quite know about the first, but we discovered this morning that the second was correct. 

April’s Bureau of Labor Statistics showed a net gain of 223,000 positions, with the adjusted jobless rate down to 5.4 percent.  The latter, along with the unadjusted figure of 5.1%, reached new post-recession lows.  As did the American Job Shortage Number.

The AJSN dropped, almost entirely due to official unemployment falling.  About 700,000 fewer Americans were technically jobless in April than in March, meaning that, taking the 90% share of them estimated to actually take work if it were readily available, they could consume about 644,000 fewer new open positions.  The 80% portion of those wanting work but not looking in the previous year was down 140,000, but latent demand from those desiring a job without being available now, estimated at 30%, added 44,100 to the AJSN, with the other categories affecting it little. 

Overall, the AJSN came out as follows:

      

AJSN  APRIL 2015	Total	Latent Demand %	Latent Demand Total
Unemployed	7,966,000	90	7,169,400
Discouraged	756,000	90	680,400
Family Responsibilities	231,000	30	69,300
In School or Training	224,000	50	112,000
Ill Health or Disability	175,000	10	17,500
Other	729,000	30	218,700
Did Not Search for Work In  Previous Year	3,144,000	80	2,515,200
Not Available to Work Now	837,000	30	251,100
Do Not Want a Job	87,616,000	5	4,380,800
Non-Civilian, Institutionalized, and Unaccounted For, 15+	9,303,810	10	930,381
American Expatriates	7,600,000	20	1,520,000
TOTAL			17,864,781

The four key secondary numbers were mixed.  The count of Americans officially unemployed for 27 weeks or more fell 100,000 to 2.5 million, the same drop in the number working part-time for economic reasons, or wanting a full-time position but not finding it, now 6.6 million.  The two indicators showing how commonplace working actually is remained similar and range-bound, with civilian labor force participation up 0.1% to 62.8% and the employment to population ratio steady at 59.3%.  Average wages went up a weak 3 cents per hour, or about 1.5% annually.

Compared with April 2014, the AJSN is 839,000 lower.  More than that was from latent demand from those officially jobless, down just over one million, offset slightly mainly by those fillable by American expatriates.    

One thing behind the numbers is particularly important this time.  April is consistently the month with the lowest average unemployment.  That is why the gap between seasonally adjusted and unadjusted figures is so large, with the unadjusted ones such as the AJSN looking better, all things equal, than any other time of the year.  Another item worth considering is that March weather was, generally, unusually bad.  That usually tends to take the edge off both sales and new hires, and push some of each into the next month.

Given these special significances, where are we now?  It was not a bad month, in context, with net job creation making March look like an anomaly.  Yet latent work demand from those not technically unemployed was down only 73,000, meaning that, with the seasonal drop in official joblessness, 60% of readily available jobs would go to those with other statuses.  That also is a post-recession extreme, and calls for public policy to cater more to the needs of other sets of non-working Americans. 

Yes, the turtle did step forward this month.  Not a huge stride, but clearly in the right direction.  Whether its progress is now good enough is for you to decide.