The Real December Jobs Report

Its that time of the month. The BLS came out with its December Jobs Report today.

BLS reports employment rose by +155,000 and the unemployment rate remained “unchanged” at 7.8%. The stock markets reacted with a collective yawn.

Hey… wait… wasn’t the unemployment rate 7.7% last month, you ask? Yes, it was. November’s unemployment got revise up a tick; hence, though now up, its unchanged from last month.

Job creation remains this nation’s greatest challenge. It makes the fiscal cliff deal seem like a cake walk. So how are we doing?

A Look Under the Jobs Report Hood

The most important unreported statistic this month is that another 2.2 million Americans dropped out of the workforce last year… +224,000 of them dropped out in December alone!

The BLS also didn’t tell us that the total national employment from the household survey rose by only +28,000 last month compared to +155,000 in the smaller (but more accurate) establishment survey.

BLS says that, at 12.2 million, the number of unemployed “was little changed in December”. Oh, yeah? Tell that to the +164,000 more newly unemployed workers in December than there were in November! They might disagree.

Btw… the BLS said that, at 12.0 million last month, the number of unemployed was “little changed” in November, too.

BLS says that, at 7.9 million, the number of involuntary part-time workers “changed little in December”. True, but it doesn’t tell us that number is nearly double what it was before the Great Recession began in 2007.

BLS says that, at 4.8 million, the number of long-term unemployed (>27 weeks) “was essentially unchanged”. True, but what they don’t tell you is that the number of unemployed in all the other duration categories are up +236,000 from November!!

Btw… the long-term unemployed now make up nearly 40% of all unemployed workers.

On the plus side, the actual number of involuntary part-time workers due to economic conditions and long-term unemployed (>27 weeks) went down a smidge in December.

White House December Jobs Report Assessment

The President’s Chairman of the Council of Economic Advisers, Alan Krueger, summed up December’s jobs situation in his first sentence:

While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression
– Alan Krueger, Chairman of the Council of Economic Advisers, 1/4/2012

Sound familiar? It should. It is the exact same opening sentence Krueger used to describe the nation’s jobs report last July, August, September, October and November!

Krueger isn’t even creative enough to come up with original lines anymore.

Alan Krueger is a mindless, cookie-cutter bureaucratic ‘yes’ man.  It appears like the Administration tells him how it wants the jobs situation presented and what to push each month and he rummages around to find anything that supports it.

His best piece of news each month is how well the private-sector (not government) is doing creating jobs. It is a cherry-picked stat whose only apparent purpose is a lame attempt to make the President look good. He ignores the jobs depression enveloping us.

If you want an accurate assessment of the nation’s jobs situation, forget about Alan Krueger.

Conclusions

Job creation in the United States is like a rowboat traveling upstream. We’ve been paddling as hard as we can since July of 2009, yet the shoreline we see is still the same. We are maintaining, but not going anywhere.

Job growth since 2009 has about matched population growth, nothing more. The millions of jobs lost in the Great Recession are unlikely to return. The December Jobs Report confirms it yet again. Real job growth remains an elusive dream.

Each December the BLS makes a huge readjustment to the household survey statistics that can go back 5 years. That makes this month a good one to review that survey.

According to the BLS, there were 2.2 million jobs created in 2012; yet there were 3.8 million more workforce eligible Americans incoming in 2012. Since December 2007 the workforce eligible population has risen by 11.2 million; yet there are still 3.1 million fewer jobs now than in December 2007!

We just went through a cantankerous argument over the fiscal cliff. That argument is not over yet, either. It was over the best way to avoid falling back into recession.

The biggest drag on the economy is not the fiscal cliff… it is a fast growing and aging population being supported by fewer and fewer productive workers. That is what needs fixing. The jobs report clearly proves it each and every month.

Advertisements

About azleader

Learning to see life more clearly... one image at a time!

Posted on Jan 4, 2013, in culture, economics, Job Creation, Jobs, Life, news, Opinion, Politics, Thoughts. Bookmark the permalink. 7 Comments.

  1. Great analysis, azleader.

    You correctly concluded with: “The biggest drag on the economy is not the fiscal cliff… it is a fast growing and aging population being supported by fewer and fewer productive workers.” Your point is bolstered by this article:
    http://www.realclearmarkets.com/articles/2012/12/10/will_aging_childless_voters_enslave_my_future_grandchildren_100034.html

    – Jeff

  2. Do we have an estimate of how many people reached the working age each month? It would be interesting to see those two numbers sidde by side over time.

    • According to this month’s Current Population Survey (Table A-1) from the BLS:

      There were 3.8 million U.S. citizens come of working age in 2012. That is a rate of 313,000/month

      Of all those, 1.531 million of them actually entered the workforce. That is a rate of 127,583/month.

  3. Yes, the jobs depression continues. So does financial repression for savers who get less in interest than the inflation rate–that will corrode spending power eventually further hurting jobs creaton. We are in a mess with a declining living standard. Sometimes I wonder if a debt jubilee is going to happen someday like 500 years ago or so when the Pope would announce the cancellation of debts as being biblically based. We of course would call it a partial default or some new Wall Street term. Maybe just maybe this writing it off would work, folks would be hit all over the place big time, but then the assets liabilities ledger would be substanially cleared. Maybe jobs could occur again with the debt burden gone. This is a radical proposal I know, but Keynes was radical for his day; and it seems like using deficit spending and debt leverage just do not have the power it once did.

    What do you think?

    • Randel,

      Similar to azleader’s reply, here’s what I would offer: Even if the “assets liabilities ledger would be sustantially cleared,” what sane creditor would EVER lend money again? Investors shy away from investing, and creditors shy away from lending, when the future uncertainty feels too risky. Predictableness is the “good karma” that creates the mental environment for healthy economic activity and growth for all. Your scenario would have to be government-mandated, and the reality is that centralized master planning doesn’t work in the long run. Under a market system based on “the rule of law,”, contractual and Constitutional commitments must be honored, or the whole “trust” thing evaporates. That’s our permanent human nature, and no utopian dream can reprogram our human instincts.

      – Jeff

  4. The problem with writing off debt is that it is good for the debtor, but horrible for the lender. Lenders then stop lending and that gets even worse.

    There is plenty of wealth out there invest in jobs and growth. It just isn’t being put to work. It won’t be put to work until creditors regain full confidence in U.S. economy and hiring workers.

Comments and questions are welcomed!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: