The headline that the administration would like us to see is "Unemployment Falls to 4.8%." The headline that most people actually saw was that the economy lost 63,000 jobs last month. The headline that nobody saw is that the so-called "Household Survey" showed a loss of 250,000 jobs. Confusing, isn't it? In our last post, we talked about the confusing "science" of employment numbers. Anybody who wants to see the report can view it at the Bureau of Labor Statistics site. Anybody who wants to understand it can read Dr. Jared Bernstein's reading of the numbers at the Economic Policy Institute site. Although overall employment was done by 63,000 jobs, civilian employment was down by 101,000. More ominous, 450,000 workers were deemed to have left the workforce (where did they go?) Had they been counted, the unemployment rate would actually have increased to 5.1% But that's the "U3" rate. The broader "U6" rate is actually 8.8%
Some more grim highlights:
- Payroll employment has now contracted two months in a row and three consecutive months in the private sector (since government tends to be less cyclically sensitive, private sector job growth is a more reliable barometer).
- December and January payroll counts were revised down by 46,000.
- The labor force contracted sharply; the share of the population in the workforce fell from 66.1% to 65.9%; the share of the population employed is down 0.5 percentage points compared to one year ago.
- Factory job loss accelerated despite gains in exports (due largely to the falling dollar). Factory jobs were down last month by 52,000.
- The number of part-time workers who would prefer full-time jobs—a measure of underemployment—is up over 600,000 over the past year.
- Both hourly and weekly earnings grew less than the rate of inflation; that is, the average worker lost income.
Oil is at $110 a barrel (it was $27 the day we invaded Iraq), wheat has doubled in the past year, the dollar is at record lows against the Euro ($1.56), gold broke through $1,000/oz. today, and silver is over $20/oz., and retail spending dropped last month, surprising the economic and financial analysts, who are surprisingly easy to surprise. But if the analysts were suprised, the public was appalled; consumer confidence is dropping even faster than the dollar.
Are we in a recession? Does the question really matter?