Strange Data’s the Jobs Report Story – AJSN Shows 800,000-Plus Jump in Latent Demand to 16.9 Million, Not All Seasonal

 

This morning’s Bureau of Labor Statistics Employment Situation Summary was peculiar. 

The number of net new nonfarm payroll positions beat published 110,000 and 114,000 estimates at 139,000.  Seasonally adjusted and unadjusted unemployment finished at 4.2% and 4.0%, the former unchanged and the latter up less than its seasonal expectation with an 0.1% increase.  Other numbers were mixed.  The count of long-term jobless, out 27 weeks or longer, dumped 200,000 to 1.5 million.  There were 100,000 fewer working part-time for economic reasons, or keeping such positions while looking thus far unsuccessfully for full-time ones, making 4.6 million.  Average hourly private nonfarm payroll wages went way past the effect of inflation, gaining 18 cents to $36.24.  The seasonally adjusted count of unemployed people stayed at 7.2 million.

On the down side, the two measures of how common it is for Americans to be working or one step away, the employment-population ratio and the labor force participation rate, dropped 0.3% and 0.2% to 59.7% and 62.4%.  There were 103,169,000 people, 595,000 more than the previous time, not in the labor force, though those claiming no interest in work fell 437,000 to 96,602,000.  Six hundred thousand fewer turned up in the unadjusted number of employed, though that was mostly seasonal.

The American Job Shortage number or AJSN, the figure showing how many more positions could be quickly filled if all knew they would be as easy to get as going to the grocery store, gained 832,000:

The largest change impacting the AJSN was from people not looking for work for the previous year, which added 600,000 to it.  Next were those unemployed and those wanting employment but not available for it now, contributing 211,500 and 105,000.  Those officially jobless made up 36.4% of the AJSN, up from April’s 36.9%.  Compared with a year before, the AJSN was within 100,000, with largely offsetting differences of fewer expatriates and more unemployed.

What was unusual about this month’s results, both in general and with the AJSN?  In thirteen years of producing this indicator, I have never seen anything like the 750,000 change in those claiming they wanted to work but had not looked for at least a year.  That explained not only the AJSN’s jump, but the gap between those with no interest in working and those in the labor force.  It also was the largest reason, as strange as it may sound, for the reductions in the labor force participation rate and the employment-population ratio.  Those saying they were temporarily available for work also soared, 350,000.  Are these the start of new patterns, or one-time oddities?  I don’t even have much of a guess, and can’t see how they could tie in with the other unusual thing about these times, the off-and-on tariffs (which once again seemed to have little or no effect on the data here).  The turtle was confused, but still put it together to take a modest but real step forward.