Friday, March 8, 2013

The "great" jobs report

Over at WaPo's Wonkblog, the resident economics expert, Neil Irwin, put up a typical piece--with regard to the mainstream media, anyway--extolling the virtues of the BLS jobs report for February. Cleverly titled Great news on jobs: Unemployment rate falls to 7.7%, 236k added to payrolls, the piece opens with the following:
The latest report on the state of the U.S. job market offered good news all around, the best reading in months on the state of the economy.
Well, alllllright! Good news all around! It's the first time we've heard such a thing since, well, the January jobs report. But wait a moment, what's this I espy in today's story, just a few lines below the "good news all around"? Why, it's the following:
The details of the Labor Department’s report, released Friday, are not uniformly rose-colored. For example, part of the decline in unemployment was caused by the labor force shrinking and people no longer looking for work.
The stupidity, the lack of critical thinking, the oh-so-obvious partisan posturing is apparent. Look at these two quotes again. First, the report is "good news all around," then it's suddenly "not uniformly rose-colored" (a literary way of saying "the news isn't all good"). Why would Irwin do this? What's the point?

Obviously, he wants to trumpet the jobs report because he's a partisan hack, so he opens with the glory. At the same time, he doesn't want to get called on his obvious over-statement, so he quickly hedges his bets, because he actually knows that the report isn't really "good news all around," nowhere close to that, in fact. Shameful. Simply shameful.

Let's be clear: there is some positive news in this jobs report, but the dropping unemployment rate is not really all that good. Why? Because as Irwin admits, the rate fell party (mostly) because the labor force participation rate fell once again. From the BLS:


This chart shows the labor force participation rate across the past ten years. Since Obama took office, it has quite obviously been trending down, down, down. Ten years ago--in February 2003--the rate stood at 66.4%. Now, it's 63.5%. In February 2009, just after Obama took office, it was 65.8%. So, from 2003 to 2009, the rate dropped by .6%, a change of -0.1%, hardly worth mentioning, really. From 2009 to 2103, the rate dropped by 2.3%, a change of -3.5%. That's friggin' huge! There's no way around it.

The current U.S. labor force is 155,524,000 (just over 155.5 million people), so 2.3% of that is equal to 3,577,052. That's nearly 3.6 million people not working and not being counted in the unemployment numbers now, as compared to 2009. Factor this in and the unemployment rate jumps to over 10%!

But the real shocker is in the raw numbers. In February 2003, there were 8.6 million people classified as unemployed by the BLS. In February 2009, there were 12.8 million. And now? There are 12 million officially unemployed persons. Again, if we factor back in all the persons excluded by the rising LFPR, that 12 million becomes over 15 million. But hey, this jobs report is GREAT.

Not enough to bring you down? Consider this from Tyler Durden at Zerohedge:
...In February according to the Household Survey, the number of full-time jobs declined by 77K from 115,918 to 115,841. The offset: a jump in part-time workers which rose from 27,467 to 27,569, or 102K...

But the most surprising development in February from a quality standpoint was that the number of multiple job-holders rose by a massive 340K, which just happens to be a record.
So, full-time employment is down and part-time employment is up. But average private sector income went up by .6%, according to the BLS. How can that be, if we assume the obvious, that less full-time work and more part-time work depresses average wages? The answer is simple: it's the record jump in people working multiple jobs. That drove up the average income for the individual.

And this is supposedly an economy primed to take off? Hardly. It's an economy that is--at best--floating along. And given what's happening around the world, it's not all that surprising. The problem here is that the Administration thinks it has a handle on the economy, thinks it knows how to "create" jobs, when in fact it doesn't have a clue. And this problem is compounded by witless dupes in the media trumpeting news that is at best middle of the road and at worst actually very bad.

Cheers, all.