The Jobs Numbers – a House of Mirrors
In February 2020, the jobs number in the US peaked at 152,504,000.
With the subsequent COVID shutdowns, total jobs didn’t fully recover until July 2022 with 152,536,000 reported that month.
But here’s the problem. While total jobs have finally totally recovered from the pandemic, the labor force participation rate has not. They would seem to be conflicting numbers.
Resolution of the statistical conflict yields an important insight into the status of the economy and also a lesson about interpreting economic data.
The jobs count comes from the Bureau of Labor Statistics’ Current Employment Statistics report. It counts jobs, not people working. So the person working two part-time jobs is counted twice, once for each job.
The labor force participation rate comes from the Current Population Survey, which counts people. People are asked if they are working. The person with two jobs is counted once. The small business owner is counted as working even though he/she does not have a payroll job but rather just profit from the company.
Moving on:
The total workforce, the actual number of people available for work, is the sum of the employed and the unemployed. In pre-pandemic February 2020 the U.S. labor force reached a high of 164.6 million persons. In November 2022 that number was 164.48 million persons.
Labor force participation means the person was either working, looking for work, or waiting for a job to start.
The Labor Participation Rate in February 2020 was 63.4%. In November 2022 that rate was 62.1%.
Using those numbers, the total number of people working in February 2020 was 104.4 million. In November 2022 there were 102.1 million working. According to the numbers there were over 2 million less working while the total labor force was essentially the same for both months.
So what happened to 2+ million people working in February 2020 but not working in November 2022? What are they doing? They’re obviously not working – and not looking for work.
Couple those numbers with a “shortage” of people to work. As of November 2022 over 10 million jobs open. That number was over 11+ million jobs gone wanting the previous and a-half. Most employers have raised their pay trying fill vacant positions. Some have had to shut down due to lack of applicants.
When one puts it all together, its obvious there are millions of people who formally worked but have no interest in, or incentive to, work now. So they are no longer counted in the Labor Participation numbers.
Those formally working people are not looking for work, so we get a low unemployment rate – currently at a low 3.7%.
But who’s kidding who? President Biden is touting the low unemployment rate – but the rate needs to be put in context. We have a low unemployment rate with millions of fewer people working. Does that sound like a strong economy? Does it even make sense under normal conditions? The answer is ‘No.”
So, fewer people are working. Yet they’re getting enough money to pay the rent, put gas in the car and buy groceries.
You can guess where that money is coming from – the government. Congress and this administration with its out-of-control spending and driving up our choking debt even further has made accommodations for more people not to work.
The private economy, other than defense contractors supplying equipment for our unwarranted, proxy war with Russia, has not recovered to pre-pandemic levels.
We are not stronger as a country. We are less self-sufficient both personally and nationally. At the same time we’re dealing with needless inflation and higher interest rates.
Let’s all wake up and fix this thing.
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Have a great and prosperous week.
Hug somebody.
References:
https://www.bls.gov/news.release/pdf/empsit.pdf
SPIDER Bites
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