Yet Another Misleading Jobs Report
Friday morning we got yet another employment report from the Bureau of Labor Statistics that looks great on the surface, but not so good deep down in the data. Nonfarm payrolls increased by 252,000 and the unemployment rate fell to 5.6%. What’s not to like about that? In fact, you have to go all the way back to May 2008 to find a lower unemployment rate.
Here’s what’s not to like: The civilian labor force fell even though the civilian population increased. Even though the number of employed persons increased by 111,000, the number of people in the labor force decreased by 273,000. Think of it this way: There was an increase in the number of people working but an even bigger decrease in the number of people who are willing to work. The labor force participation rate fell to 62.7%.
What about wages? Because they were up in November, economists were hoping this was a trend. Not so. Average hourly wages fell in December by a nickel to $24.62. Average weekly earnings fell over the month by $1.73 to $850.12. It’s a good thing gasoline prices are down.
So once again we see that more jobs were created but even more people dropped out of the workforce. As I have explained before, retiring Baby Boomers explain only some of the decline in the participation rate. The remainder is due to people just giving up trying to find decent work. The job market is definitely better than it was, yet there is no way we could call it healthy.
Read Vahan’s blog at Janjig.com.