The news reports, like this one from USA Today, say that the Bureau of Labor Statistics is reporting an increase of just 38,000 jobs in May 2016:
The labor market slowed dramatically in May as employers added 38,000 jobs, raising concerns that a sluggish economy is taking a bigger toll on employment and lowering the odds of a Federal Reserve rate hike this month.
The unemployment rate fell from 5% to 4.7%, lowest since November 2007 the Labor Department said Friday, but that was because nearly 500,000 Americans stopped working or looking for jobs. The paltry employment gains were the smallest in 5 1/2 years.
Economists surveyed by Bloomberg expected 160,000 new jobs, with net gains reduced by 35,000 because of the now-settled Verizon strike. That total thus would have been roughly equivalent to the 200,000-plus additions that have been a staple of the payroll recovery in recent years.
But more forces more significant than the strike dragged down payroll gains last month. Also discouraging: Job growth for March and April was revised down by a total 59,000. March’s tally was revised to 186,000 from 208,000, and April’s, to 123,000 from 160,000.
but that only tells part of the story. The “birth-death ratio”, the adjustment the BLS applies to account for their estimate the impact of businesses started or terminated, is responsible for 224,000 jobs.
So, how many jobs were created or lost in May 2016? We don’t know but depending on how much confidence you have in the birth-death ratio adjustment as many as 190,000 jobs may have been lost.
I think that all of this adds up to a dwindling labor force participation rate. The change in the LFPR since 2007 is undoubtedly a social development as important as the entry of women into the labor force in the the 1970s and 1980s. I suspect there have never been as many idle adults in the United States as there are today.
I can only speculate as to what all of those idle people are doing. If the news here in Chicago is any gauge, they’re drinking, doing drugs, and shooting at each other.
Fewer people are working, and the unemployment number keeps dropping. Nothing to see, keep moving.
I know. We are all racists, homophobes, misogynists, blah, blah, blah.
Reynolds has left the building, Tasty. You no longer get treated to such wise insights.
As I am sure you are aware, Dave, the birth death adjustment has come under broad scrutiny for quite some time, even if assiduously avoided in the press. Even Doug over at OTB prefers only the headline news. ZH has beaten it to death.
In any event, it’s a convenient place to hide the statistical dead bodies. No doubt “unexpectedly” will be heard from some quarters. The truth is, job creation paired with a measure of job quality (earnings) and the age distribution for LFPR paints a very poor labor market picture. Sadly, given that it’s an election year there is zero chance of remedial action or honesty on the subject. Just claims of peddling fiction. I know they are desperate to hold the economy together through the election, but the spate of crappy reports that came out this week indicate that could be a losing battle.
The other day I read a very interesting analysis of the LFPR. The gist was that neither the Baby Boomers retiring explanation nor the “they’re all in school” explanation really explains what’s happened.
In any event, it’s a convenient place to hide the
statisticalactual deadbodiescareers.FIFY
The other day I read a very interesting analysis of the LFPR. The gist was that neither the Baby Boomers retiring explanation nor the “they’re all in school†explanation really explains what’s happened.
Given that LFPR has dropped in every category of worker UNDER age 55, it never did. It was convenient bullshit for an Establishment that’s trying to keep the lid on everything while they steal every last goddamned thing that isn’t tied down in the country.
More and more people seem to sense this is what’s happening. Add to this the Democratic Party Riot Machine trying to win the election by bashing heads, and things are bound to get worse.
Again, the Trump candidacy isn’t a movement at this point – it’s a protest by voters who are fed up. Give it another two to four years and things will really come unhinged. You ain’t seen nothin’ yet.