The September jobs numbers are out and the left is skipping around like Navin Johnson flipping through a brand-new phone book. There is some reason to celebrate, though I wouldn’t exactly crack open the good champagne, for a reason I’ll explain in just a bit.
First, the good news. Unemployment dropped below 8 percent for the first time in 44 months and it didn’t get there because a whole bunch of Americans gave up and stopped looking for work.
The unemployment rate in the U.S. unexpectedly fell to 7.8 percent in September, the lowest since President Barack Obama took office in January 2009, as employers took on more part-time workers.
The economy added 114,000 workers last month after a revised 142,000 gain in August that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 92 economists surveyed by Bloomberg called for an advance of 115,000. The jobless rate dropped from 8.1 percent and hourly earnings climbed more than forecast.
That is a very good unemployment number. It’s not nearly what we had during the Bush years, but these days anything below 8 percent feels like a triumph. On the other hand, those numbers don’t quite add up. How is it we added 142,000 jobs and got a 0.2 drop in the unemployment rate last month while this month we added fewer jobs but got a bigger drop? Much of last months rate drop came from people leaving the job market. This month, that didn’t happen. In fact, people entered the job market. Well, kind of.
The falling jobless rate had been a function as much of the continued shrinking in the labor force as it was an increase in new positions.
But the government said the total number of workers employed surged by 873,000, the highest one-month jump in 29 years. The total of unemployed people tumbled by 456,000.
The total labor force grew by 418,000, possibly accounting for the relatively modest net level of job growth compared to the total employed. The labor force participation rate, which reflects those working as well as looking for work, edged higher to 63.6 percent but remained around 30-year lows.
Well, that doesn’t help much. More odd numbers. We added 114,000 jobs, part of 873,000 workers who entered the job market, yet the unemployment rate dropped by 0.3 percent. We’re 759,000 jobs short. Let’s see where they might be…
The level of part-time workers reported the largest jump for the month, gaining 582,000.
Ah! Well now we’re getting somewhere. If you add up the new full-time jobs and more than three times as many part-time jobs, you have a number that’s closer to that 873,000. Still, we’re 177,000 jobs short. So where are they?
Simply put, they may not exist. Well, they exist, but not as official jobs the BLS can count. There are two surveys the BLS does. One is the establishment survey, which checks employers and official paperwork to see if there are any new jobs, what kind of jobs they are, and how many people have applied for unemployment benefits. This is the “on the books” survey. The other is the household survey, where they ask people if they’re working and what kind of work it is. We tend to assume these numbers will match each other, but there’s an entire off the books economy that divides the two.
Look at it this way. If you paid someone a hundred bucks a day to clean your house and keep your yard picked up, that person could tell the household survey they had a job, even though that job wouldn’t show up in the establishment survey. Same goes for those Mom and Pop stores that avoid reams of paperwork and otherwise job-killing taxes, regulations, and such by paying a couple people part-time wages to sweep up or run a cash register for a couple few hours a day. You know what else might qualify as a job? Working for barter.
The official jobs numbers are still bad. Job growth is slower now than it was last year, which means we’re not exactly recovering. The “U-6″ unemployment rate, which also includes people who are working part-time because that’s all they can find and those who have stopped looking for work, is stuck fast at 14.7 percent. What this tells me is we’re settling into a trough of resignation. Folks aren’t holding out for full-time work because the work just isn’t there. They’re taking part-time jobs and working under the table to pay their bills, more now than at any point in the past few years. Those are not signs of a recovering economy but the opposite. Americans are now looking for ways to get around the government to survive. Government is not a help but an impediment and so resourceful Americans are stitching together whatever they can find, above board or not, to put food on their table, a roof over their heads, and increasingly expensive gasoline in their cars.
Category: The Economy and Your Money