August Data: Employment Increases Cooled Slightly, With Mixed Report – AJSN Reports Latent Demand Down 350,000 to 16.7 Million

This morning’s Bureau of Labor Statistics Employment Situation Summary looked fine at the top, with its 315,000 net new nonfarm positions vindicating the published 300,000 estimate, and covering several times our population-increase requirements – but what was in it otherwise?

Seasonally adjusted unemployment rose 0.2% to 3.7%, with 300,000 more or 6.0 million jobless.  On the unadjusted side, there were 350,000 fewer people working but an almost unchanged number unemployed, 1.1 million more saying they did not want a job, and unemployment at a third-straight 3.8%.  The counts of long-term jobless or out for 27 weeks or longer and those temporarily laid off were unchanged or virtually so.  The two measures of how common it is for Americans to be either working or one step away, the employment-population ratio and the labor force participation rate, both improved, reaching 60.1%, up 0.1%, and 62.4%, up a surprising 0.3%, respectively.  Clear downsides were in the number working part-time for economic reasons or holding such work while seeking a full-time opportunity, up another 200,000, and average private nonfarm payroll wages, dropping away from inflation with a weak 9-cent gain to $32.36. 

The American Job Shortage Number or AJSN, the indicator showing how many new positions could easily be filled if all knew they were readily available, lost substantially, as follows:

This morning’s Bureau of Labor Statistics Employment Situation Summary looked fine at the top, with its 315,000 net new nonfarm positions vindicating the published 300,000 estimate, and covering several times our population-increase requirements – but what was in it otherwise?

Seasonally adjusted unemployment rose 0.2% to 3.7%, with 300,000 more or 6.0 million jobless.  On the unadjusted side, there were 350,000 fewer people working but an almost unchanged number unemployed, 1.1 million more saying they did not want a job, and unemployment at a third-straight 3.8%.  The counts of long-term jobless or out for 27 weeks or longer and those temporarily laid off were unchanged or virtually so.  The two measures of how common it is for Americans to be either working or one step away, the employment-population ratio and the labor force participation rate, both improved, reaching 60.1%, up 0.1%, and 62.4%, up a surprising 0.3%, respectively.  Clear downsides were in the number working part-time for economic reasons or holding such work while seeking a full-time opportunity, up another 200,000, and average private nonfarm payroll wages, dropping away from inflation with a weak 9-cent gain to $32.36. 

The American Job Shortage Number or AJSN, the indicator showing how many new positions could easily be filled if all knew they were readily available, lost substantially, as follows:

The improvement came from fewer people wanting work but not looking for it for a year or more, taking 229,000 away, and a 122,000 reduction from not as many discouraged.  The other components above, as a group, almost precisely broke even.  The share of the AJSN from those officially unemployed is still about one-third, with a 0.7% gain to 33.7%, and compared with a year before the AJSN is down over 2.1 million, almost all of that from lower unemployment. 

On the pandemic side, there were mild changes between July 16th’s and August 16th’s New York Times data.  The seven-day rolling average of new daily cases fell 23% to 100,854 – the same for deaths rose 10% to 467, hospitalizations increased 3% to 41,830, and vaccinations were up 18% to 275,267.  As our situation becomes a de facto endemic, we see no indication that people are overly endangering themselves by working.

So what happened this morning?  It was a strange report, with contradictory numbers, and a settling one, with, quite possibly, narrow ranges becoming established.  A goodly number of people seem to have left their jobs, either moving to the fringes of work or claiming no interest.  There are ever more positions out there, but, between slower wage gains, plenty of people not upgrading their part-time employment as they want to do, and more job advertisements, their quality may be dropping.  That is not good, and many potential employees, with higher standards than two years ago, are being disappointed.  In September, when more people go back to work, we may see better numbers including an even lower AJSN.  This time, however, we still improved, so the turtle eked out a modest step forward.