The Real Jobs Report: February 2014
The BLS Monthly Jobs Report for February is out. It’s odd. Though more jobs were created than expected, the unemployment rate still went up unexpectedly, providing further proof that the two most quoted jobs numbers each month – nonfarm job creation and the unemployment rate – don’t mean what they used to.
Total nonfarm jobs came in higher than expected at +175,000 for February. Economists had thought it would be around +150,000 with the unemployment rate remaining unchanged. Instead, the unemployment rate jumped a tick to 6.7 percent instead of down.
This contradiction is usually explained by workers returning to the labor force when the economy begins to improve. In that sense, it’s good news. Officially, the BLS described unemployment this month as “little changed”.
The one thing the BLS never does is explain a drop in the unemployment rate being caused by workers leaving the labor force. Unfortunately, many, if not most, of the unemployment decreases over the last couple years resulted from labor force dropouts.
News reports are cautiously optimistic about job growth later this year when the weather improves.
View from the White House
February 2014 was the 48th straight month of private-sector job growth, with businesses adding 8.7 million jobs
– Jason Furman,
White House Chairman of the Council of Economic Advisers, 3/7/2014
The White House painted its usual happy face on things, emphasizing that things will be even better if the president’s budget is adopted by Congress.
Furman identified five “key” points:
- The private-sector added 8.7 million jobs in 48 months.
- A major snowstorm affecting jobs hit the east coast.
- Recent monthly jobs estimates are “a bit less volatile” than under George W. Bush.
- It’s Women’s History Month; female unemployment remained steady the last two months.
- Industries, professional services, business services and state and local government had a strong February.
The rest of the story…
Here are other sobering facts the White House didn’t report:
- Total nonfarm jobs are up +8.0M in 48 months; -700,000 fewer than Furman reports
- There are -1.1 million fewer government jobs than in May 2010
- There are +3.5 million more Americans unemployed today than in February 2007
- Working age population has grown +16.2 million since February 2007
- The civilian labor force has grown by only 848 thousand since October 2008
- There are -666 thousand fewer Americans with nonfarm jobs today than in January 2008
- Labor participation rate – 63 percent – remained steady near its lowest level in over three decades
- Employment-population ratio – 58.8 – remained steady near its lowest level in over three decades
The White House Chairman of the Council of Economic Advisers, Jason Furman, makes a cherry-picked +8.7 million more private-sector jobs in 48 months sound mighty good until you look at the big picture.
There are -666 thousand fewer total nonfarm jobs today than before the Great Recession despite that there are +16.2 million more working age Americans. The Labor participation rate and employment-population ratio remain stuck at 30 year lows. U6 unemployment is still at a very high 12.6 percent.
Put lipstick on a pig and it’s still a pig. The United States has been in a jobs depression for six years and it looks like it will be around for a long time to come.