By Hugh, who is a long-time commenter at Naked Capitalism. Originally published at Corrente. A complete archive of Hugh’s reports can be found here.
Short Form: In seasonally adjusted terms, 165,000 jobs and unemployment dropping to 7.5% are OK, but not great results. At that job creation rate and taking population growth into account, it would take about 2 years to reduce by one million those currently unemployed. The BLS estimates current unemployment at 11.815 million. I calculate it at 20.542 million. So perhaps I should not say OK but rather next to nothing is being done to address the jobs situation.
In unadjusted terms, April was a good month, but then it should be. It is in the heart of the spring hiring season. Employment grew by 1,026,000, and 878,000 of that was full time employment. Even so, 2013 is shaping up to be worse than 2012 for employment and similar to the first half of 2012 for jobs.
In general, workers are not doing well. The jobs being created are mostly of poor quality. 19.5% of them are part time. Weekly hours and wages declined last month. And the BLS continues to underestimate the number of those without jobs by between 9 to 9.5 million.
So an OK month, but one which will do little to resolve the jobs crisis which is both a crisis of numbers and quality.
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In April, the potential labor force as measured by the civilian non-institutional population over 16 increased 180,000 from 244.995 million to 245.175 million. Multiplying this by the seasonally adjusted employment ratio for April (58.6%) gives a rough estimate of the number of jobs needed to keep up with population growth: .586(180,000) = 105,000.
Seasonally adjusted (trend line), the labor force increased 210,000 from 155.028 million to 155.238 million. Unadjusted (actual), the labor force grew 227,000 from 154.512 million to 154.739 million.
The labor force participation rate, that is the ratio between the labor force as measured by the BLS and the potential labor force (NIP) remained unchanged from March both adjusted and unadjusted. Seasonally unadjusted, it was 63.3%. This is the lowest participation rate since May 1979, that is 34 years ago. Unadjusted, it was 63.1%, the lowest participation rate since May 1978 (35 years ago). There are 3 major factors weighing on these numbers: 1) the bad economy reducing the number of employed, 2) baby boomers beginning to retire out of the labor force also depressing employment, and 3) the BLS undercount of those it does not count as unemployed although they do not have a job but would work if a job was available.
Seasonally adjusted, the number of employed increased 293,000 from 143.286 million to 143.579 million. Unadjusted, employment grew 1,026,000 from 142.698 million to 143.724 million. That is a huge number. It finally exceeds the November 2012 Christmas season high of 143.549 million. However, the kicker here is that we need two more months of this kind of very large growth to match the last late year peak to mid-year peak growth from November 2011 to July 2012 (2.132 million). By comparison, we are currently only 175,000 employed beyond the November 2012 peak. All this is to say that while the unadjusted April number is very good, it is unlikely that the November 2012-July 2013 peak growth will come close to that which we saw November 2011-July 2012, as in it could well be 500,000-700,000 lower.
Seasonally adjusted, unemployment dropped 83,000 from 11.742 million to 11.659 million. Unadjusted, it fell 801,000 from 11.815 million to 11.014 million.
The degree of these drops is reflected in the unemployment rate which fell 0.1% seasonally adjusted to 7.5% (this is the official unemployment rate) and 0.5% unadjusted to 7.1%.
Seasonally adjusted, full time employment (35 or more hours/week) increased 150,000 to 116.053 million, and part time employment (1-34 hours/week) increased 107,000 to 27.549 million. [There is a discrepancy of +23,000 between the sum of these two numbers and the employed figure reported above.]
Unadjusted, full time employment increased 878,000 to 115.674 million and part time unemployment grew 148,000 to 28.050 million. [These sum correctly to the number for unadjusted employment.] The full time employment number is good. It means that only 14.4% of the increased employment in April came from part timers. This is better than the average. [These data comes from the A-8 table.]
The seasonally adjusted rate for part time work is 19.2%. The unadjusted rate of part time work is 19.5%.
However, the data from the A-9 table which breaks down part time work into for and not for economic reasons are at major odds with the A-8 data. Seasonally adjusted, part time work for economic reasons increased 278,000 to 7.916 million and for non-economic reasons, 163,000 to 18.908 million. [Reasons for part time work for non-economic reasons include childcare problems, family or personal obligations, school or training, retirement or Social Security limits on earnings, etc.] This would suggest that part time workers increased by 441,000 in April. Similarly, unadjusted, part time workers for economic reasons declined 25,000 to 7.709 million but increased 567,000 for non-economic reasons, netting to an increase of 542,000. The totals for these part time workers do not sum out to their A-8 counterparts, and their monthly increases contradict them. This is an ongoing problem, and I have no explanation for it.
The BLS’ broader measure of un- and under employment, the U-6, increased, seasonally adjusted 0.1% to 13.9%, and declined 0.5% to 13.4%, unadjusted.
Seasonally adjusted, the U-6 is composed of 11.659 million unemployed, 7.916 million involuntary part time workers, and 2.347 million of the marginally attached (those who have no job but looked for work in the last year but not the last month), or 21.922 million total, an increase of 216,000 from March.
[Standard note] The BLS has a restrictive, though internationally recognized, definition of unemployment, that is without a job but have looked for one in the last 4 weeks. The marginally attached are not counted as part of the labor force and their use in the U-6 is an indication that this is what the BLS considers its functional undercount to be.
The BLS also has a more extended category: Not in Labor Force, Want a Job Now (seasonally unadjusted). In April, this decreased 70,000 from 6.399 million to 6.329 million.
This category, however, does not reflect well actual movements in the economy. So I have developed a simple alternative to it. I calculate the size of where the labor force should be by multiplying the potential labor force of the NIP by a participation rate characteristic of a solid economic expansion (67%). The difference between this and the current labor force measures the size of the real BLS undercount, those who do not have jobs but would work if jobs were available to them. This then allows me to recalculate where real unemployment is and where real un- and under employment (disemployment) is.
.67(245.175 million) = 164.267 million (where the labor force should be)
Trend Undercount:
164.267 million — 155.238 million = 9.029 million, a decrease of 90,000 from March
Current Undercount:
164.267 million — 154.739 million = 9.528 million, a decrease of 107,000
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Real Trend Unemployment (that is seasonally adjusted) :
11.659 million (U-3 unemployment) + 9.029 million (undercount) = 20.688 million, down 173,000
20.688 million / 164.267 million = 12.6% down0.1%
Real Unemployment Now (i.e. seasonally unadjusted) :
11.014 million (U-3 unemployment) + 9.528 million (undercount) = 20.542 million, down 908,000
20.542 million / 164.267 million = 12.5% down0.6%
_________________________________________________________
Real Trend Disemployment:
Real Trend Unemployment + involuntary part time workers seasonally adjusted = 20.688 million + 7.916 million = 28.604 million, up 105,000
28.604 million / 164.267 million = 17.4% unchanged
Real Disemployment Now:
Real Unemployment Now + involuntary part time workers seasonally unadjusted = 20.542 million + 7.709 million = 28.251 million, down 933,000
28.251 million / 164.267 million = 17.2% down 0.6%
The long term unemployed, as defined by the BLS (active job seekers out of work 6 months or more) decreased 258,000 to 4.353 million. The long term unemployed account for 37.3% (down 2.0%) of the U-3 unemployed.
The improvement in the unemployment rate came from across the board decreases. White unemployment was unchanged at 6.7%. African American unemployment declined 0.1% to 13.2%. Black teen (16-19 years old) increased 6.7% to 40.5%. White teen unemployment was 21.8%.
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In the business survey, the private sector added 176,000 jobs (seasonally adjusted). Government lost 11,000, netting a gain of 165,000 for a total 135.474 million. In addition, the Feburary jobs number (seasonally adjusted) was revised upward 64,000 to 332,000 and March, 50,000 to 138,000.
Unadjusted, private sector jobs increased 937,000 in April to 113.232 million. Government lost 5,000 to 22.262 million. The sum of these is 932,000, yielding 135.494 million total jobs. Unlike the employment numbers, the jobs figures look on track to meet the November peak of the previous year as they usually do in June or July (The November 2012 peak was 135.636 million.)
Unadjusted construction added 160,000 jobs, but manufacturing only added 15,000. Private service providing grew 764,000, of which retail added 108,000, and food and drinking places, 202,000. In other words, many of the jobs created in April were in low wage, poor quality sectors.
Average weekly hours for all employees fell 0.2 hours to 34.4. As a consequence, although hourly earnings increased 4 cents an hour, weekly earnings decreased $3.39 to $821.13.
Much the same was seen for production and nonsupervisory employees (blue collar and clerical workers). The work week declined 0.1 hour to 33.7 hours, hourly wages increased 2 cents to $20.06, but weekly wages dropped $1.33 to $676.02.
Household data (Employment/unemployment)
Statistical significance: +/ – 400,000
The A tables: http://www.bls.gov/cps/cpsatabs.htm
A 1 for most information and categories
A 2 Unemployment by race
A 8 Part time workers
A 9 Full time workers
A 12 Duration of unemployment
A 15 U 6 un- and under employment
A 16 Persons not in labor force
Establishment date (jobs)
Statistical significance: +/ – 100,000
The B tables: http://www.bls.gov/ces/cesbtabs.htm
B 1 Total jobs and jobs by industry/type
B 2 Weekly hours, all employees
B 3 Hourly and weekly earnings, all employees
B 6 Weekly hours, blue collar
B 7 Hourly and weekly earnings, blue collar
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As the number of jobs increases the real wage rate declines for full timers as well as part timers …
To say that inflation is only at 1-2% is ludicrous. IOWs purchasing power is falling dramatically.
This is exactly how the “powers that be” want it. They need to cut economic activity while showing gains …
The reason for this is that the world has now passed the tipping point for oil production and climate destruction is rampant.
Without slowing consumption inflation becomes uncontrollable and their already low ball stats become a joke …
They must keep interest rates down or most developed countries implode with unpayable sovereign debt …
The number of lives being ruined by lack of jobs is the ugly underbelly of ongoing high unemployment. Thanks for speaking truth to power with your report Hugh!
What a human travesty and yet allowed and thought necessary by the supposed most advanced nation in the world…..total BS. America is a banana republic with nukes and enough derivatives to hold the dollar status as Reserve Currency as a gun to the head of the world’s public.
We will never return to “full employment” until we redefine work, inheritance and private ownership of property.
Great Analysis. Under employment is where the game is. There are so many that would work if they could so this is a National and Global tragedy (look at the EU).
The Economy will never recover until the bad debts are washed out of the system – message to Big Government – get out of the way and let the Market reward the Winners and smash the losers (The Robber Baron Big Banks).
I guess full recovery will be when we start accumulating new bad debts.
Think of how endlessly lauded the ‘innovators’ of our ‘new economy’ are. When in reality elites extract money from everyone else in as brutal and primitive a manner as possible.
At least some smart members of our elite just take free money and put it in their own pockets, the rest cannot boast this integrity. This is why they live in constant fear of the rest of us, even if we have no idea they exist. How else could you explain their constant attacks against us?
We’ll get (positive) elite action only after an immigration bill is done – no way they’ll let labor demand outstrip supply.
good post, hugh; note that zero hedge took that decline of 0.2 hours in workweek and multiplied it by the 135,474,000 payroll jobs reported this week and figured that the workweek decline was the equivalent of a loss of 618,000 payroll jobs..
This is like living in Czarist Russia just prior to the Revolution. These people don’t have a clue as to how bad things really are (or maybe they do). In a world where you either work or you starve: Let “The Great Die Off” begin.
The fact of the matter is, you still need to bring your Magic Decoder Ring and your Enigma machine just to know how badly your are being lied to about the true condition of the economy and the country. It is like living in Czarist Russia just before the Revolution. “Problems? What problems?”
I posted this on my FB yesterday, but it bears repeating here:
For the very wealthy, the US economy has been in a 13-year sweet spot. Price inflation, for the proles at least, is low. This gives the Feds plenty of “wiggle room” to give cheap bucks to uberwealthy aristocrats and protected rentiers. Job growth and wages have consistently fallen behind inflation since 2000. Combined with a well-timed financial bailout, this has allowed the share of GDP flowing into elite wallets to grow almost every year. Human Need, Survival of the Fittest, Top Talent, knowing The Secret, Following God’s Laws–horsepuck propaganda, every word. It comes down to overt status- and power-grabbing. When poor folks do better, rich people feel poorer. So it has always been and shall ever be.
In the Soviet Union, Party Elites lived in private compounds, lavishly decorated, supplied with clean water and good food, environmentally protected. Not much different from (AlGore + DickCheney)’s Federally protected back yards. For the peasants and the proles, it was useless currency, a dessicated Aral sea, raw sewage and acid rain, the blows softened only by great agitprop and cheap vodka.
And so we have become. For America’s elites it’s pristine environments, free healthcare, golden parachutes, the guaranteed-income welfare state. For all the rest it’s the Law of the Jungle, Chained CPI, Debt Slavery, and a TeaParty at Rick Santelli’s house. America’s lost the Cold War, 20 years too late. I pray daily for Glasnost and Perestroika. Until then I have just three words:
“God Bless the U$$A”
Cameron,
I presume that you realize that the greatest numbers of “America’s elites” are government employees?
that’s only true of the topmost tier. everyone else are their lackeys/general dogsbodies. i’m sure Lord Soandso’s page felt like an elite compared to field_vassal_6103, but in reality he, like a gov’t employee, is just another tick on the mastiff’s behind.
Sell your stupid elsewhere, Dave. Better yet, go work for Fox, CBS or any of myriad “Liars without a Clue” strokers of the wealthy ego. If you’re going to be a tool at least have the self-respect to be a toady.
Cameron,
Thanks for the advice! I’ll look into that. I guess I should change my attitude and do something positive rather than just being a “blamer” all the time.
How about we consider that private village known as THE FEDERAL RESERVE CORPORATION, and its too many minions.
http://www.glassdoor.com/Salary/Federal-Reserve-Bank-NY-Salaries-E5421.htm
http://www.indeed.com/salary/Federal-Government-Worker.html
if you try an go after the number of people to each entity…might i remind you the highest paid group chooses what the lowest paid group will vote for.
DAVE = This name creates caustic expression and moods which prevent harmony and happiness in close association.
What an excellent strategy. We may be living under the collective tyrannical thumb of those clerks at the DMV. But we can–we will–overcome them through the works of Tony Robbins, Rhonda Bryne, and L Ron Hubbard!
Who needs Keynes, Darwin, Weber, Marx, or Nietzche? We’ve got the Tinkerbell school right here at NC. Keep thinking lovely thoughts and pass the Pixie Dust!
Casting government workers as the bad guys is like blaming the teller at your bank for the 2008 meltdown. The rich and elites not only loot us, they have been waging a class war against us. Part of this is setting various segments of us in the 99% against each other. Government workers are a particularly enticing target because they are the last group of workers in this country who are significantly unionized. What pay and benefits they have won through their unions is portrayed as special treatment to be done away with rather than a model for other workers to use to secure similar pay and benefits for themselves through *gasp* unionizing.
Yes. 30+ years ago when I started as a government employee, it was something of a sacrifice. You could actually get better pay and benefits in the private sector. What’s happened since is not that government work has gotten more privileged than it was (we’ve had pay cuts and layoffs too) but that private industry workers have lost almost all the perks they used to have.
Government workers are an enticing target in part because so many visibly shirk actual work. I suspect this is due in part to the fact that each functionary is circumscribed as much as possible and most of them gladly accept narrow roles. How many times have you heard ‘that’s not my department’ from a guy whose desk is completely naked?
Anyone who believes that government ‘works’ has never paid close enough attention. Of course, ‘private enterprise’ doesn’t work much either, particularly as businesses get bigger and ever more monopolistic. Slaves at the bottom groan under crushing burdens, but managerial factotums mostly just show up, trade bromides and platitudes, generate spred sheets founded in fantasy, and kiss ass.
It is truly fantastic how much economic activity involves the production and sale of completely useless dreck. Our GDP is in large measure a mountain of shit, and people are compelled to compete for access to shovels, often teaspoons.
Group work is vastly overrated. Most people who accomplish anything worthwhile do most of it by themselves. I don’t know why I am bothering to write this, except to suggest that more people should stop chasing pointless jobs and try to build themselves sensible lives.
― Matt Taibbi, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
Vodka, phooey! We gets the marijuana. Stoned and declining. Crank up Comfortably Numb.
swap the vodka for coprinopsis atramentaria oil & things are not what they seem…what a surprise
https://www.youtube.com/watch?v=UqlsVZ1zxMk
Thanks Hugh. I hope the Fed is reading you just so they know that we know.
Funny. In that same Cspan show of investment companies aka banks, 2 nites ago, Lloyd Blankfein was giving elaborate non explanations of the state of the economy and in one of his goofy inconclusive run-on sentences he touched on what a good job the Fed was doing balancing its dual mandate. Blankfein is an idiot.
He is not an idiot. He loves his benefactor and versa vicea. In a make believe economy, make believe financial products reign supreme.
Good post. I’m no historian….
The feudal peasant / artisan worker was offered ‘acceptable, conventional’ – for him, her, living conditions or not, the nots being dispensable without anyone objecting (for a long time)..plus, the social hierarchy was strictly enforced. Marx’s worker had to be paid a living wage, for his labor, that participation, etc. Ford’s employee had to be paid enough to be a consumer, an economic actor, decision taker, with a stake in a more global circuit or system (labor had to be paid to encourage consumption and thus growth, democracy, participation, etc.) More generally, in recent history, national interest, or group cohesion often involved making sacrifices for the common good, with ideological goals trumping wages for the lowly (e.g. World War II in GB.) Stalinist and other ‘Communisms’, as well as National-Socialism were other models for nationalistic forward leaps, or conquering moves if one likes, which involved not just supposed necessity and the related pragmatism, but over-arching ideologies (of differing flavors…)
Apologies for the potted, partial history. It seems to me that the current state of affairs, as existing, enacted or analyzed, discussed, borrows in a confused, disorganized manner from all these models, and that a new one is slowly, haltingly emerging.
One certainty: a large number of trained, efficient, happy workers are no longer seen as needed or contributing, for a host of reasons. I’m scratching my head over how exactly to cogently describe the present with a view to sketching the future, there are many paths to follow.
Andrea,
Your “One certainty” sentence hits the nail exactly on the head. As far as I’m concerned, the primary in the “host of reasons” is found by looking at your computer. Due to our own cleverness in creating the digital society we now need a new social system, and that is not going to be easy. We’ve been conditioned for the last few centuries to value productive work and usefulness to society. Now that one person can easily do the work of several, many folks are “no longer seen as needed or contributing”. This can be quite traumatizing!
everytime I see this post up on the BLS here at NkedCap
it automatically becomes “BS jobs report” in my visual field
somewhat like Carpenter’s “They Live”
Marry
Consume
Don’t think
:)
Hugh,
Nice article.
I started to try to dig into your 67% target for full employment, in part because I thought demographic factors should be taken into account since the BLS labor force doesn’t have an upper age limit. Turns out the aging population aspect is not a big deal (okay, it could maybe shift the target by 0.4%, but there are really too many factors to consider for such a simplistic analysis).
But I’m still curious about how you arrive at 67%. Why not much higher? During the 50s, the labor participation rate among males was >85%. Why not lower, as the only time the US has seemed to come close to 67% overall was briefly in the late 90’s. I’m honestly just curious.
This chart seems relevant, as well:
https://en.wikipedia.org/wiki/File:US_Labor_Participation_Rate_1948-2011_by_gender.svg
Thanks!
That is ending imo. Most of the 30/40 gang is going into temp with the factory.
I am seeing less youth unemployment all the time.
Re the participation rate, between October 1996 and June 2000, a period of 45 months, the participation rate, with the exception of one month, was at or above 67%. (The high was 67.3%.) I felt a participation rate that could be maintained for nearly 4 years was not a fluke, and that the 1990s were close enough to us that the economy then and now were about as similar as I was ever going to find. 67% was an empiric choice. It is not an immutable law. So much depends on how we define work and the labor force, the kind of economy we have or want. The participation rate could either rise or fall dramatically. But for now it is the best, I could come up with.
Re the demographics, as you say, there are several variables: how many boomers are in the labor force, differences between early boomers and later boomers, how many boomers will choose or need to work past 65, mortality before and after 65, size of the post-boom generations, their participation rates, etc. The current ongoing economic crisis both changes and masks the underlying trends. Boomers started hitting 65 in 2011, but so far the effects on the participation rate seem minimal. So for the time being I’m holding off on making any adjustments. If I start seeing a trend, and I am looking for one, I will make adjustments then.
I heard a report today (on NPR of all places) that kids in high school can’t get part-time or entry-level jobs because those jobs are all being grabbed up by 30- and 40-year-olds who’ve been laid off. Yet another way in which we’re destroying our future.
LFPR is dead as a indicator. More people are leaving the workforce than entering it.
Upward revisions projection has about 225,000 jobs created a month in the last year with temp firms doing alot of the factory hiring. Heck, you can make as much in Wal-Mart as in a factory nowadays. See!!! The jobs are coming back!!!
Thanks, Hugh. These reports are some of the few signposts to navigate by these days.
Would be interesting to see if the sequester has any causal effects that can be teased out from Obamacare effects. Though these may overlap, they may have predominant effects in different employment sectors.
Barron’s reported this weekend that, according to the household survey (brought to their attention by the Liscio Report), 306,000 joined the ranks of the self employed, more than the 293,000 overall gain.
Non-agricultural self-employed workers increased (seasonally adjusted) 244,000, and agricultural self-employed workers increased (seasonally adjusted) 62,000, producing the 306,000 you refer to. Again these are trend numbers and do not represent what happened in April.
Unadjusted non-agricultural self-employed workers increased 368,000, and agricultural self-employed workers increased 83,000 for a total of 451,000.
Those are impressive rises, but mostly because there was a big dip in overall self-employment in March, a loss of 286,000. Take that into account an the increase February-April is 165,000.
The other thing is that these numbers, 8.632 million non-agricultural self-employment and 783,000 agricultural (unadjusted) are in keeping with the past 4 years and smaller than pre-recession ones.