The Real February Jobs Report
The Bureau of Labor Statistics (BLS) released February’s monthly jobs report today.
It exceeded all expectations. It’s one of the best looking jobs reports in months:
- Unemployment dropped from 7.9% to 7.7%
- Employment grew +236,000 over January
- Construction employment up +151,000 since September
However, the good news masks the rotten core that yet remains hidden under the hood. Ignore it at our economic peril.
Good News, Bad News
The BLS is a highly public government agency that presents facts favorable to whatever administration is in power – Democratic or Republican.
Things are never as rosy as presented in the monthly jobs report. The bad numbers are either minimized or ignored. That is to be expected. Its up to us to find the reality check.
For example, just three months ago the same drop in November’s unemployment – 7.9% to 7.7% – was hailed as recovery! We’ve recycled back to that same point today.
The best news is +236,000 more people are employed this month. If it stands up, it’s real and noticeably higher than population growth. Months like this have come to few and far between over the last 5 years.
President Obama’s chief economic adviser, Alan Kruger, was so ecstatic that (for the first time in 7 months) he changed from the old, worn-out boilerplate opening sentence used in previous White House economic monthly reports!
Kruger still only reports private-sector job growth to make the President look artificially better, instead of truthfully reporting total job growth, like he should. Some things never change.
There is plenty to keep you awake at night, however. The markets, though up today, have reacted rather tepid to this report.
Labor Participation Rate
One of the most economically meaningful numbers in the jobs report these days is the civilian labor force participation rate.
It measures the percent of all eligible workers in the United States that are actually working. It went down this month because 296,000 workers dropped out of the labor force last month. More people dropped out of the workforce than got hired!
Fewer participants means more human suffering; lower GDP; more government spending; larger deficits; and, less tax revenue to pay for it. Its bad in every way.
It fell a tick from 63.6% to 63.5%.
The labor participation rate is the lowest its been in 30 years! It’s down nearly 4% since the year 2000.
Labor rate participation is a chief economic problem among problems!
Labor participation isn’t the only area of concern hidden in this month’s jobs report. There are others. A couple are:
- 1.8 million fewer workers in the labor force than in February 2012
- 466,000 more Americans this year than last want work, but can’t find it
- U.S. remains way below full employment
The job growth slope shown in yellow above is the same after the Great Recession bottomed out in January 2010 as it was before it started in 2008.
Most disturbing of all is that the graph clearly shows that the 8.7 million total nonfarm jobs lost in the Great Recession are NOT returning. They are gone.