Initial Reaction
Today’s employment report shows a robust increase of 235,000 jobs. And for the first time in many months, the rest of the report was good as well.
Revisions
The change in total nonfarm payroll employment for December was revised down from +157,000 to +155,000, and the change for January was revised up from +227,000 to +238,000. With these revisions, employment gains in December and January combined were 9,000 more than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 209,000 per month.
Let’s dive into the details in the BLS Employment Situation Summary, unofficially called the Jobs Report.
BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +235,000 – Establishment Survey
- Employment: +447,000 – Household Survey
- Unemployment: -107,000 – Household Survey
- Involuntary Part-Time Work: +242,000 – Household Survey
- Voluntary Part-Time Work: +286,000 – Household Survey
- Baseline Unemployment Rate: -0.1 to 4.7% – Household Survey
- U-6 unemployment: -0.2 to 9.2% – Household Survey
- Civilian Non-institutional Population: +164,000
- Civilian Labor Force: +340,000 – Household Survey
- Not in Labor Force: -176,000 – Household Survey
- Participation Rate: +0.1 to 63.0 – Household Survey
Employment Report Statement
Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate was little changed at 4.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in construction, private educational services, manufacturing, health care, and mining.
Unemployment Rate – Seasonally Adjusted
Nonfarm Employment Change from Previous Month
Nonfarm Employment Change from Previous Month by Job Type
Hours and Wages
Average weekly hours of all private employees were steady at 34.4 hours. Average weekly hours of all private service-providing employees were steady at 33.2 hours. Average weekly hours of manufacturers were steady at 40.8 hours.
Average hourly earnings of private workers rose $0.04 to $21.86. Average hourly earnings of private service-providing employees rose $0.02 to $21.61. Average hourly earnings of manufacturers rose $0.03 to $20.65. All of those gains were a mirage because of downward revisions of gains in January.
For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will comment further.
Table 15 BLS Alternate Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said “better” approximation not to be confused with “good” approximation.
The official unemployment rate is 4.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 9.2%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
- In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
- In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
- In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
Final Thoughts
Details last month were terrible. This month. the establishment survey and the household survey were in sync. However, employment growth still lags job growth despite the huge jump in employment of 447,000.
A year ago there were 151,043,000 employed. Today there are 152,528,000 employed. That’s a gain of 1,485,000 which equates to 123,750 per month.
Last month, I reported, “Employment growth was +129,000 on average from a year ago, +79,000 per month since March and only +11,000 per month for the last three months.”
Over the last four months the gain in employment averages about 120,000 a month.
The divergence between jobs and employment is still strong.
Mike “Mish” Shedlock
Would really appreciate your thoughts on the disconnect between consistent job growth and weak US GDP growth that is unfolding inQ1’17. Thanks!
I don’t see a disconnect. Rather a timing issue. Jobs precede GDP growth. New hires are not very effective in increasing output for a few months. On the front end, they hinder output as they take away others to train them. Eventually, the new jobs will mean greater output.
Job growth that is built on debt costs a lot more than job growth built on true economic demand.
The jobs that moved south (they are moved jobs, not new jobs) are no longer providing tax support for the infestation of bureaucrats up north in liberal disaster zones. But the bureaucrats still have jobs, paid with more and more municipal debt.
The bureaucrats chased away the jobs and the taxpayers — they should suffer the consequences of their own actions. Instead, we have this debt bubble fraud going on.
Fed Tax receipts which are mostly driven by Business have crash to near record lows for the past 3 months. we are most likely already in a recession
Seeing it here in Florida. Everybody who wants a job has one. Lot’s of high-paying companies relocating here. Seems like all at once, everyone owns an F150. The fed needs to start cooling the economy before inflation starts ramping up.
Saw the same during my last visit to FL… but that is local news.
Nationally, many of those jobs were destroyed in high tax liberal sh!t holes Chicago, NYC, etc. and they MOVED to Florida. Millions of lazy useless government bureaucrats have made their pensions dependent on taxing jobs that have moved away.
In the liberal sh!t holes, the lost private sector jobs will lead to trillions in new debts that eventually will ruin the country.
These jobs were NOT created. They MOVED. Huge difference.
PS — I don’t blame the manufacturing workers for finally standing up for themselves. Its about time that their pay goes to their families, instead of supporting corrupt government unions.
I wonder now that Obamacare is repealed, we will start seeing significant job losses in the medical industry? The hospitals and medical facilities here where I live were receiving MONSTER funds (grants) from the fed government due to Obamacare. Remember, the healthcare industry is almost 35% of US GDP.
The joke when Bill Clinton was president was “Bubba created a million jobs, and I have three of them”.
235K jobs were created, but they pay less (both salary / benefits) than the jobs that were destroyed by Obamacare and the sick bureaucracy that is Washington DC.
Trump promised to drain the swamp… when will that start?
There was an increase in full time jobs and a decrease in part time. Something we haven’t seen lately. I wonder if the removal of the employer mandate in the ACA had anything to do with it.
Hi Mish
Thank you for all the datas available for free on this site we learn a lot of facts, you may be right unemployment rate in the Usa is closer to 9 % rather than the mainstream media 5% number but I would stress that it is the same discrepancies in other countries around the world eg in France the official number is 9 % but the real is closer to 15 % and in the ever rioting suburbs 30 % and that is the result of left wing parties and socialisme policies.
Regards and put the right ballot in the box in April presidential elections
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Reblogged this on John Barleycorn and commented:
Agreed
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The labor force at the company (Fortune 100 size) I work for is 20% contractors, and my manager can’t find “qualified” candidates to bring on as permanent, even from outside the temp pool. I’m in the pool, and don’t want to go permanent because I would be enabling chaos instead of doing a professional job.
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I’ve got a lot of time left on my contract but am looking elsewhere. I reopened my search 1st of January and have responded to positions where I feel there are very good matches. On both applications through agencies, the hiring managers responded within 24 hrs to schedule a phone screen. One manager posted the position before it was budgeted, and the other manager wanted more FDA regulatory skills than technical skills. There are 2 to 3 other positions I have not responded to because I’m waiting for the budget to pass. There are jobs out there, but relocating is often required. Sell the house this spring and rent until that new job is offered.