When the Labor Department released its always highly-anticipated jobs report this morning, the most-cited numbers looked pretty good at first glance, with the unemployment rate dropping a hair from 7.4 percent to 7.3 percent, and the economy adding around 160,000 new jobs. Seems good, right? At least not bad? Neil Irwin
pulls back the curtain:
But in almost all the particulars, you can find signs that this job market is weaker than it appeared just a few months ago, and maybe getting worse. The drop in the unemployment rate was caused by 312,000 people dropping out of the labor force. The number of people actually reporting having a job actually fell by 112,000 in the survey on which the unemployment rate is based.
Moreover, some analysts were expecting that the job numbers from previous months, which are always updated from this initial first estimate, would be revised upwards if the economy were indeed gaining steam. Instead, as Joe Weisenthal
put it: “Last month was revised SHARPLY down from 162 to 104K. That is quite ominous.”
These numbers, as is evident above, are always subject to revision and it is unwise to put too much stock in any one report, but when so many numbers start slumping together, pessimism starts to set in. Irwin again:
Consider this: The nation has averaged 148,000 new jobs a month for the last three months. The number was 160,000 for the last six months, and 184,000 a month over the last year. That looks to me like a downward trend, no two ways about it. It’s certainly not the gradual acceleration that most mainstream economists have forecast as 2013 advances and the impact of tighter fiscal policy fades.
Want another sign? The proportion of the U.S. population that had a job in August was 58.6 percent. Six months earlier, the number was a whopping — wait for it — 58.6 percent. The year is nearly three-quarters over, and the economy isn’t growing fast enough to put a higher proportion of its citizens back to work.
