Wow — what a stinker of a jobs report. First, let me show you why it’s worse than it looks. Then I’ll show you why it’s even worse than that.
The big number, 8.2% unemployment, is down one-tenth of one percent from last month, on 120,000 net new jobs. But 120,000 is only just barely enough to keep up with population growth, because that’s about how many people should enter the labor force each month, every month, the whole year round. But even more people — 164,000 — simply gave up, stopped looking for work, and are no longer any concern of the BLS. The experts had predicted jobs growth of anywhere from 200,000 to 250,000.
ASIDE: We need to net about 1.5 million jobs a year just to stay even with our growing population. We’ve netted about 2.5 million in the almost three years since the Great Recession ended. So we’re almost two million jobs short of nothing more than treading water. Yeah, that’s bad.
Tyler Durden said it best: “The unemployment rate drops to 8.2% for one simple reason: the number of people not in the labor force is back to all time highs: 87,897,000.” Jim Pethokoukis noted that if the LFPR were the same as when Obama took office, the unemployment rate would be 10.9%. But “discounting for cyclical, aging issues, the unemployment rate would be 9.4%.” Either number is unacceptable near the end of the third year of “recovery.”
But now we get to the really bad part.
If I’m reading BLS correctly, 90,000 of those jobs — 75% of the net — are attributed to the “birth/death” model for new business. And that model has been broken for several years, as ObamaCare and Dodd-Frank have made it increasingly difficult for entrepreneurs. We don’t just have discouraged workers; we also have discouraged employers.
So nobody really knows how many jobs were created last month. As previously noted, “The numbers, they are awful.”
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