The US Job Market: February 2015: The Headlines and Beyond

This article was originally released at my website.

Jeff Altman, The Big Game Hunter, and his views on the job market.

“I have been blogging about the job market in the US and around the world since August 2001.”

What I write is not designed to be political or critical; they are my observations and sense of where we are and where we are going.

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The data according to the US Bureau of Labor Statistics is that non-farm payroll increased by 257000 jobs.

Unemployment increased .1% to 5.7%. This was interpreted as being because more people were now entering the workforce after having not tried to get a job diring the previous 4 weeks.

The unemployment rate for teens increased to 18.8%.

The jobless rates for adult men (5.3 percent), adult women (5.1 percent), whites (4.9 percent), blacks (10.3 percent), Asians (4.0 percent), and Hispanics (6.7 percent) showed little or no change.

In January, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.8 million. These individuals accounted for 31.5 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 828,000.

After accounting for the annual adjustments to the population controls, the civilian labor force rose by 703,000 in January. The labor force participation rate rose by 0.2 percentage point to 62.9 percent, following a decline of equal magnitude in the prior month. Total employment, as measured by the household survey, increased by 435,000 in January, and the employment-population ratio was little changed at 9.3 percent.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in January at 6.8 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

Employment in retail trade rose by 46,000 in January. (This is unusual since most retailers lay off after the Christmas rush)

Construction added 39,000 jobs, health care employment increased by 38,000, employment in financial activities rose by 26,000 in January, with insurance carriers and related activities (+14,000) and securities, commodity contracts, and investments (+5,000) contributing to the gain. Financial activities has added 159,000 jobs over the past 12 months.

Manufacturing employment increased by 22,000, Professional and technical services added 33,000 jobs and food services and drinking places increased by 35,000).

NOW FOR THE FUN STUFF

Follow along for a moment.

Every month, the BLS adjusts the numbers based upon certain assumptions. Usually these assumptions involve an incerase in the number of jobs that are created by small businesses they can’t prove exist that created jobs they cannot prove were created. Yes, you read that right.

January is the exception to this rule. This is the one month of the year where jobs are actually subtracted. Why? Because they believe that after “the Christmas rush, retailers lay off what are referred to as “season workers.”

That makes sense to me and probably to you.

Now for the curious stuff.

In December, 2014, there were 141.483 million jobs in the United States. In January, 2015, there were only 138.728 million. That is a loss of 2.755 million jobs.

However, the BLS anticipates this and created a revision using their model that said 257000 new jobs were created.

HERE IT COMES

One year ago, the data showed that there were 138.327 million jobs in the US in December 2013. That number dropped to 135.516 million in January 2014. Yet the seasonal adjustment that occurred one year earlier when employment in January, 2014 — after being seasonally adjusted — rose by a very anemic 113000 jobs that was later revised to 166000 jobs.

I’m showing the adjustments done for two consecutive Januarys.

In other words, according to the BLS, more jobs were cut in January 2014 and resulted in fewer jobs created than this year.

Doesn’t make any sense. More jobs were cut a year ago than this year but more jobs were created this year than last year. They’ve probably changed the model to make things look better. After all, more job cuts resulted in fewer jobs created than this year.

In addition, the government reported healthy growth of 2.6% in the 4th quarter of 2014 but what they neglected to mention and what most reports don’t mention is that 20 percent of that growth was healthcare spending and the majority of that spending was taxpayer-funded subsidies derived from the Affordable Care Act.

In addition, when the government revised the 3rd quarter statistics on economic growth upward, most of that increase was also caused by the ACA.

As always, the jobs report does not differentiate between new part time jobs and new full time jobs. To the report, a job is a job is a job.

Jim Clifton, the Chairman of the Gallup Organization, broke down the data.

“Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%.”

“The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.

Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.”

So there you have it.

The adjustment may have been changed, full time jobs are at a historic low and much of the economic growth has been caused by healthcare spending and, in particular, the affects of the ACA.

(©) Jeff Altman, Asheville, NC 2015

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