- by New Deal democrat
- +242,000 jobs added to the economy
- U3 unemployment rate unchanged at 4.9%
With the expansion firmly established, the focus has shifted to wages and the chronic heightened unemployment. Here's the headlines on those:
Wages and participation rates
- Not in Labor Force, but Want a Job Now: down -103,000 from 5.973 million to 5.870 million
- Part time for economic reasons: unchanged at 5.988
- Employment/population ratio ages 25-54: up +0.1% from 77.7% to 77.8%
- Average Weekly Earnings for Production and Nonsupervisory Personnel: unchanged at $21.32, up +2.4%YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were neutral to negative.
- the average manufacturing workweek was unchanged at 41.8 hours (but last month was revised up +0.1. This is one of the 10 components of the LEI, the net will be a posittive.
- construction jobs increased.by +19,000. YoY construction jobs are up +253,000.
- manufacturing jobs decreased by -16,000, and are up +25,000 YoY.
- Professional and business employment (generally higher-paying jobs) increased by +23,000 and are up 604,000 YoY.
- temporary jobs - a leading indicator for jobs overall decreased by -9,800.
- the number of people unemployed for 5 weeks or less - a better leading indicator than initial jobless claims - increased by +48,000 from 2,249,000 to 2.297,000. The post-recession low was set 6 months ago at 2,095,000.
Other important coincident indicators help us paint a more complete picture of the present:
- Overtime was unchanged at 3.3 hours.
- the index of aggregate hours worked in the economy fell by -0.4 from 105.3 to 104.9.
- The broad U-6 unemployment rate that includes discouraged workers declined from 9.9% to 9.7%.
- the index of aggregate payrolls fell by -0.7 from 127.8 to 127.1.
- the alternate jobs number contained in the more volatile household survey increased by +520,000 jobs. This represents an increase of 2,843,000 jobs YoY vs. 2,673,000 in the establishment survey. [Note: I updated this to correct an error, as I originally had +555,000 jobs for this]
- Government jobs rose by +12,000.
- the overall employment to population ratio for all a ges 16 and above -rose by 0.2 from 59.6 to 59.8 m/m and +0.5% YoY. The labor force participation rate rose 0.-1% from 62.7% to 62.9% and is now up +.0.1% YoY (remember, this incl udes droves of retiring Boomers).
The headline numbers - strong job gains, and a decline in the broad U6 underemployment rate - are certainly welcome.
Other significant positives included positive revisions to the last two months, an increase in both the employment to population ratio and labor force participation rate, and a decline in those out of the labor force who want a job now (but still about 1.4 million above its 1999 and 2007 lows).
But there were some significant and/or worrisome negatives as well. Last month's big increases in wages and hours were partially reversed. More worrisome was the establishment of a trend in declining temporary jobs (a leading indicator for overall employment), and negatives in two other leading sectors: a rise in short term unemployment, and a loss of manufacturing jobs
In short, while the strong positives in coincident measures of employment are certainly welcome, the decline in some important leading indicators for employment raises a significant yellow flag.