After hours of hand wringing about the disappointing jobs report this morning, followed by progressive tweets about “maybe now D.C. will do something about jobs instead of the deficit (fist waving)”, and conservative tweets saying “Ha, the Obamasequester is going to be blamed for this! #tcot”, I swam over to the other, more thoughtful side of the think tank.
The overall labor force is at it’s lowest since 1979. That’s a whole lot of jobs that the job creators have shed over 34 years. That’s a painful reality of outsourcing, globalization and greed. That’s one of the reasons the 1% have aggregated so much more wealth than they had in 1979. So that sadness continues.
We know that the USPS cut 12,000 jobs in March, and that continues the woeful public employment numbers that have dragged down the overall jobs numbers despite private increases all through this recession (something like 700,000 public jobs gone). This difference alone, unlike previous recessions where public jobs held steady or increased, has made it a way tougher slog to normalcy. So that sickness continues.
However, via Joe Weisenthal, Matt Busigin, an economist and investor claimed this was a “great” report. Why:
- The important leading sub-indices (professional/business services, construction) were strong.
- In the key demographic groups, unemployment dropped massively, suggesting that a lot of what people are worried about is just based on aging demographics, not anything cyclical.
- As for the mass exit from the workforce, it finally appears that people have the confidence to retire.
But he wasn’t alone. Over at Bonddad’s blog New Deal Democrat pointed out that:
- The broad U-6 unemployment rate, that includes discouraged workers, fell a full .5% from 14.3% to 13.8%
- the index of aggregate hours worked in the economy also surged .3 from 97.9 to 98.2
- temporary jobs – a leading indicator for jobs overall – increased 20,300
- construction jobs added 18,000
- the number of people unemployed for 5 weeks or less – a better leading indicator than initial jobless claims – fell by 203,000 to 2,464,000. This may be a new post-recession low. If it isn’t, it’s close (I’ll double check this and update). UPDATE: It’s the second best by 11,000. In March 2011, the number was 2,453,000. This is NOT recessionary.
- January’s report was revised up 29,000 to 198,000. February was revised up 32,000 to 268,000. Positive revisions like this happen in recoveries, not at the onset of recessions
- average hourly earnings increased $.01. While the YoY change declined to +1.8%, when we get the CPI for March we are probably going to find that real, inflation adjusted hourly earnings are the most positive in several years
- the average workweek increased .1 to 34.6
- overtime hours increased .1 to 3.4
- the most commonly reported unemployment rate, U-3, also declined to a new post-recession low of 7.6%
Finally, in what I guess will provoke the most heated debate from this report, almost 500,000 people dropped out of the labor force. This is why the various unemployment measures declined. The employment/population ratio declined to 58.5%, and the labor force participation rate dropped to the lowest level since 1979. How much of that is pessimism by potential employees, and how much is the ever increasing level of Boomer retirements I will leave up to the combatants, but you probably would be right figuring that a lot of both is going on.