The Real Jobs Report: September 2013
The September BLS Jobs Report was shutdown delayed unnecessarily for 18 days this month.
No matter. It was a blah report. It wasn’t worse, nor was it better than the average month in recent years.
+148,000 non-farm jobs were created in September. Unemployment inched downward again to 7.2%; now the lowest level since December 2008.
The unemployment drop should be cause for celebration, but isn’t.
The same systemic labor forces that inhibit economic growth remain in place:
- Dwindling Labor Force Participation (63.2%)
- U6 unemployment excessively high (13.6%)
Those two factors are what make the unemployment rate look a lot better than it really is. Workers are permanently dropping out of the workforce in droves. Many that remain are taking part-time jobs due to economic conditions.
The White House now has a worthy new economic adviser at the helm. He is Jason Furman, newly made Chairman of the Council of Economic Advisers. He’s sharp. He knows his stuff. He is infinitely smarter than the fence post he replaced, Alan Krueger.
Though Furman is better, he’s still an administration spinmaster to be wary of. A review of his take on this month’s jobs report proves it.
The White House Jobs Assessment
Furman suggests the current jobs picture is affected by uncertainty (economists always say that), lack of job creation (Duh!) and that new October weekly statistics indicate October’s report will be worse than September.
Furman makes five salient points in his monthly assessment.
Lets take each one in order…
1- Private-sector Job Growth
Like Krueger before him, Furman starts off by pointing out that we’ve now had 43 consecutive month’s of private-sector job growth.
It’s very nice of Furman to credit the private-sector with carrying the hero’s load for recovering the economy over the Obama Administration.
The private-sector is fighting headwinds created by ineffective administration policy and constant Congressional political bickering that has hampered economic growth since the underwhelming “Stimulus” was passed back in February 2009.
The Fed is doing more to stoke the economy than anyone else through monetary policy. Government fiscal policy is a disaster.
Notice that, like Krueger, Furman doesn’t identify a single administration policy that has helped the private-sector grow. He just takes credit for it.
2 – Weekly Numbers Show Shutdown/Default Woes Will Hurt October
Furman correctly points out before October that pre-shutdown 4-week averaged UI filings were their lowest since May of 2007 and that it has a slight uptick this month.
That’s good news, but if October’s jobs numbers are down, it won’t be because of the shutdown.
For proof, he cites that October’s weekly unemployment claims are up because of the furloughs.
Normally, he’d be right about its effect. But what he cleverly omits is that in the settlement all furloughed workers got PAID for their furloughs! That never happens anywhere else but government. It negates their economic impact.
He also fails to point out that federal workers often double dip, collect UI benefits that they do not repay. The administration will not police it.
In economic terms, with UI benefits and regular salaries, the federal furloughs should actually stimulate the economy in October!
3 – Local Education Employment Up
Furman very astutely points out that local education employment has finally turned the corner. That is a big deal after five long years of decline.
Back in 2009-2010, 330,000 K-12 education jobs were artificially maintained with “Stimulus” money.
When that funding ran out without any real economic recovery, then education jobs plummeted, reflecting the real reduction in local tax collections.
But since January this year, K-12 teacher hiring has started to climb again because of real private-sector driven economic growth.
Furman is quick to point out, correctly, that education jobs are still years away from pre-recession levels.
4 – Employment Rate for Women Down to December 2008 Levels
Furman highlights women’s unemployment (6.7%) while downplaying men’s unemployment (7.7%).
Women, obviously, have fared much better in the recession than men. Why?
Furman accurately puts the onus for men’s higher unemployment on the loss of high paying construction and manufacturing jobs.
Before the recession women’s unemployment rate was slightly less than men. As the recession progressed male unemployment peaked over 11% while female’s peaked much lower at about 9%. Men took a direct salvo from the Great Recession. Women took a harsh, but glancing blow.
Note that, at present, men’s unemployment seems to be leveling off high while women continue to find jobs.
5 – Employment Has Averaged 2 million Jobs Per Year
Furman cleverly highlights only job creation numbers, but does it using a misleading thing called “payroll-concept” adjusted employment. This writer never heard of it.
Those of us living in the real world count actual BLS jobs to find out how many jobs were created.
Furman misrepresents things in several ways…
The first way is with “payroll-concept” employment. By actual calculation from BLS employment figures out of the household survey we’ve average 1.7 million jobs created per year since job recovery began in December 2009. That compares to 2.3 million/year in the gravy days of Bill Clinton when the population was smaller.
The next misrepresentation is he fails to mention that 8.6 million jobs were lost between November 2007 and December 2009 at the beginning of the Great Recession and that only 6.7 million of those jobs have returned.
Most important, though, he fails to mention that since job recovery began in December 2009 that we should have created 8.5 million jobs just due to population growth alone!! In this recovery, we have actually created 1.8 million fewer jobs than that!
In other words… we are still losing jobs!!!
The technical economic term describing this circumstance is, “That’s bad!” (See Graph Below)
New White House Chairman of the Council of Economic Advisers, Jason Furman, is a great improvement over his predecessor, Alan Krueger.
Furman is smart and very good at documenting and explaining his take on the Monthly Jobs Report.
However, he is still a spinmaster for the Administration and, as such, you have to read between the lines to find out what the real jobs situation is.
Unfortunately, the millions still without work, or who’ve given up looking or are underemployed due to economic conditions don’t need to be told anything. They already know.