The jobs numbers are horrible, worse than anyone had thought they’d turn out to be. 18,000 total jobs created, with a decrease of 39,000 government jobs. Let’s get some graphs.
High level (click through for larger image):
This is off household surveys, which is going to be slightly different numbers than the payroll you are seeing for aggregate job creation. The big thing we see is that the labor force shrunk while unemployment increased, a bad sign. Meanwhile, we see a jump in those who are not in the labor force but who want a job – people who have given up actively looking for a job.
To zoom into that, let’s take a look at the arrows leaving the unemployment circle. Here’s a graph of how people are exiting unemployment – are they finding work or simply giving up?
The unemployed continue to be more likely to drop out of the labor force than find a job. As we’ve mentioned before, the idea that people are more likely to drop out of the labor force than find a job is a brand new phenomenon, one that doesn’t exist in the data going back to when data is first collected in the 1960s.
At this point, the conventional unemployment rate numbers are becoming meaningless. The employment-to-population ratio is more important. The employment-to-population ratio dropped 0.2% for men and 0.3% for women. Let’s look at this on a longer time-line:
Meanwhile, how’s the economy working out for those with jobs? Average weekly earnings of all private employees dropped from $791.20 to $788.56. We can’t really have an inflationary spiral based on prices and wages if wages are decreasing. Also without a buildup in wages, it’s harder to argue that we are having a “structural unemployment problem” – those who do have the skills necessary to get a job aren’t turning that into higher wages. And this also means we don’t even have a recovery for those who are not the worse off – as Matt Frost said, “the technical term is a ‘recovery-less recovery.’”
Matt Yglesias shows how the number of government workers have continued to decline under the Obama administration, especially at the state and local level. This has been a pretty clear conservative priority and it’s dragging down the recovery.
There’s no silver lining in today’s job numbers. The discussion immediately needs to shift away from deficit reduction to jobs growth, in terms of public works, tax breaks for workers and getting to the bottom of the foreclosure crisis and shadow housing inventory.