Friday, June 7, 2024

The Lukewarm Reports Continue: Plenty of New Jobs, but AJSN’s Latent Demand Is Up to 16.8 Million, with Unemployment and Other Key Figures Worse

This morning’s Bureau of Labor Statistics Employment Situation Summary was important for other observers and me for different reasons.  Most were concerned with whether the job market was cooling off, meaning that if it was, we might see lower interest rates sooner.  They got a mixed result – while the number of net new nonfarm payroll positions again beat expectations, coming in at 272,000 instead of 180,000 or 190,000, seasonally adjusted unemployment broke upward out of a 10-month range to 4.0%.  I was looking to both the second of these and other figures, which taken together give us more insight than any one or two can provide.

There, the results were more bad than good.  Unadjusted joblessness rose 0.2% to 3.7%, mostly not for seasonality.  We reached 6.6 million adjusted jobless, up 100,000.  The count of people out of work for 27 weeks or longer also hiked 100,000, to 1.4 million.  The two measures of people with jobs and those also officially jobless, the employment-population ratio and the labor force participation rate, fell 0.1% and 0.2% to reach 60.1% and 62.5%.  The number of people working, unadjusted, fell 249,000 to 161,341,000. 

On the plus side, the count of those not interested in working shed 667,000 to 94,413,000.  Those working part-time for economic reasons or keeping less than full-time employment while looking for something with more hours lost 100,000 to 4.4 million.  Average private nonfarm payroll earnings rose 12 cents, more than inflation this time, to $34.91. 

The American Job Shortage Number or AJSN, the measure showing how many additional positions could be quickly filled if all knew they were easy and routine to get, increased almost 800,000 to reach the following:


The largest contributor to higher latent demand was people available for work but not looking for it over the past year, which added almost 400,000 more than last time to the metric.  Most of the rest of the increase was from unemployment itself, but those discouraged and those wanting work but not available for it now also added significant amounts.  Compared with a year before, the AJSN has also gone up, mostly from official unemployment, just over 400,000.  The share of the AJSN from unemployment rose 0.3% to 33.4%.

With all those new jobs, which the reduced number of people not interested more than absorbed, why can’t I rate this report higher?  Adding to the preponderance of evidence from the second through fourth paragraphs above, and the worsened AJSN, are the smaller categories therein.  There will be little discussion elsewhere about the effect of more people discouraged, not looking for the previous year, and temporarily unavailable, but they conceal a lot of people not making it in today’s market, new jobs notwithstanding.  Just as the count of those claiming they do not want a job decreases during truly good times, fewer people turn up in these smaller groupings when they see employment opportunities they like.  If they were counted as unemployed, their effect would be on front pages. 

Overall, we’re no longer in our best job market times.  That 272,000 can only go so far.  The turtle, last month, stayed right where he was.

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