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U-3 drops again – the real story behind the numbers
Compiled by SUA Staff
Friday’s release of the February jobs report was received with mixed reviews. Yes the U-3 number went down again to 5.5% but again, that Bureau of Labor Statistics designation leaves so much out of the story. The more precise statistic, the U-6 dropped as well from 11.3% to 11.0%. Here is the topical story from USA Today:
The economy added 295,000 new jobs in February, according to the Bureau of Labor Statistics, blasting past economists’ expectations of 240,000 new jobs.
The unemployment rate fell to 5.5% from 5.7% in January, the lowest since May 2008, when the rate was 5.4%.
Businesses added jobs in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing. Government payrolls rose only by 7,000, and jobs in the mining industry fell.
The BLS revised January’s job gains to 239,000 from 257,000 and left December’s 329,000 estimate unchanged, for a total downward revision of 18,000. Job gains have averaged 288,000 a month the past three months. Nevertheless, February was the fourth-best month for jobs since January 2014.
The so-called encouraging news shows that jobs are not all equal as we have pointed out on numerous occasions. What is a job? Where are the careers, the full-time jobs, the chance to advance? Here are the data on what types of jobs were in that increase:
Job growth last month was heavily concentrated in the service sector, with leisure and hospitality adding 66,000 jobs, as well as an expansion of 54,000 jobs in education and health. Construction added 29,000 jobs in February, while manufacturing increased by a modest 8,000. Gains were also made in professional services and the trade and transport sectors. (NY Times)
Dissecting those numbers reveals continued concerns. Of these concerns are the Labor Force Participation Rate, a record number of woman no longer in the labor force, the comparison between “native-born” and “foreign-born” workers, the impact on the stock market, a wage-growth slump, and the stagnation of growth to name but a few.
Labor Force Participation Rate – 92.898 million Americans are not in the labor force:
SOURCE: CNS NEWS
The labor force participation rate hovered between 62.9 percent and 62.7 percent in the eleven months from April 2014 through February, and has been 62.9 percent or lower in 13 of the 17 months since October 2013.
Prior to that, the last time the rate was below 63 percent was 37 years ago, in March 1978 when it was 62.8 percent, the same rate it was in February.
“The civilian labor force participation rate, at 62.8 percent, changed little in February and has remained within the narrow range of 62.7 to 62.9 percent since April 2014,” the BLS said in its release on the February employment data.
92,898,000 Americans were not in the labor force in February, according to data released from the Bureau of Labor Statistics (BLS) on Friday. (Read more at CNS News.)
Women in the Work Force – CNS also reports on record number of women not in labor force:
A record 56,023,000 women, age 16 years and over, were not in the labor force in February.
Not only was that a record high, but it’s also the first time the number has exceeded 56 million, according to data from the Bureau of Labor Statistics (BLS).
To be counted as ‘not in the labor force,’ according to the BLS, one must not have a job or have looked for one in the past four weeks. In January 2015, there were 55,756,000 women not in the labor force, which means that 267,000 women dropped out of the labor force since then.
Foreign-born versus Native-born Work Force
Since the beginning of the recession in December of 2007 — it is believed to have ended in June 2009 — while the native-born population of Americans has experienced a net job loss, the foreign born population has seen net job growth.
AP Photo/Alden Pellett
New, not seasonally adjusted figures, from the Bureau of Labor Statistics updated on Friday reveal that in December 2007 the number of foreign-born workers was 22,810,000. By last month, February, the number had increased to 24,741,000.
The new data mean that overall, since the start of the recession, foreign-born workers have gained more than 1.9 million jobs.
Meanwhile, in that same time frame, the native-born employed population decreased from 123,524,000 to 122,378,000 in February 2015, for a total employment reduction of more than 1.1 million.
To be sure, however, native-born Americans experienced more job growth last month than their foreign born counterparts. While the foreign born employed population increased 188,000 the native-born employed population increased by 379,000. (Read more at Breitbart.)
Wage-growth slump
“…wage gains continued to lag, rising only 0.1 percent in February for private-sector workers after a reported 0.5 increase in January. That resulted in a mere 2 percent advance over a year earlier, washing away the encouraging jump in January.”
…still, one consistently dark patch in the recovery has been the sluggish growth of wages. It suggests that the economy is still far from returning to its potential and is a big factor behind the sense among many Americans that the recovery has largely left them behind.
“Everyone knows of someone who has been laid off or has a friend or relative who has been laid off,” said Gary N. Chaison, professor of industrial relations at Clark University in Worcester, Mass. “We hear we’re on the road to recovery, but people aren’t convinced of that.” (Read more at the NY Times.)
The Impact on the Markets
Stocks Tumble as Dollar, Bond Yields Soar on U.S. Jobs Report – Jobs report solidifies expectations Fed may raise interest rates as soon as June:
The jobs data reinforced views among many investors that the economy is doing well enough to survive a Fed rate rise after years of stimulus efforts.
But the prospects of higher rates was seen as bad news among some investors who see Fed easy-money policies as having been a major prop for the stock market. It also was seen as unfavorable for the euro, as higher rates in the U.S. make the U.S. dollar a more attractive investment than the common currency, as the European Central Bank embarks on an aggressive easing effort.
The Dow Jones Industrial Average posted its biggest loss since late January, as the blue-chip index dropped 278.94 points, or 1.5%, to 17856.78. The S&P 500 shed 29.78 points, or 1.4%, to 2071.26. The Nasdaq Composite Index slid 55.44 points, or 1.1%, to 4927.37.
Despite the selloff in stocks, which came just four sessions after the Dow industrials and S&P 500 hit records, investors said the broad outlook didn’t change much. Many investors still believe the Fed could hold off until later in 2015 to begin raising interest rates, and that any tightening of monetary policy will be slow and well-telegraphed as long as inflation pressures stay low. (Read more at the WSJ)
Black Unemployment
On the eve of the commemoration of the 50th anniversary of the civil rights march in Selma, Alabama, the unemployment rate among African Americans remains more than twice that of white Americans and nearly twice the national average.
According to the latest jobs figures released Friday by the Bureau of Labor Statistics, the African American unemployment rate for the month of February was 10.4 percent, compared to the white unemployment rate of 4.7 percent and national average of 5.5 percent.
The latest African American unemployment rate represents a slight uptick over the January figure of 10.3 percent. Whites experienced a slight decline in unemployment from January’s rate of 4.9 percent and the national average also dipped from 5.7 percent.
While the White House boasted about February’s job gains of 295,000 jobs and its 5.5 percent unemployment rate Friday morning, it did acknowledge the “unacceptably high” unemployment rates among African American and Hispanic populations. (Read more at Breitbart.)
Gross Domestic Product – On February 27th we were given this report on the over all growth of our economy:
“People are looking at GDP to make sure the economy is still intact,” said Marc Chaikin, CEO of Chaikin Analytics.
Economists polled by Reuters expected the revised reading of U.S. growth in the fourth quarter to show a gain of 2.1 percent from a preliminary reading of 3.9 percent. The final reading of the third-quarter GDP showed 5 percent growth.
“Obviously, expectations there are lowered pretty significantly,” said JJ Kinahan, chief derivatives strategist at TD Ameritrade. The “GDP can only hurt the market. If we don’t meet those expectations we’ll be pretty much in trouble (because those expectations are already so low).” (Read more at CNBC.)
After 6 years of the Obama economy, and the end of the “Great Recession,” many wishful thinkers, administration sycophants, and ideologues want to tell us the economy is steadily improving. Realists look at it as stagnation at best. We at SUA see it as another Obama failure.
We are not economists at SUA, but we certainly read as much as we can and examine the picture on a macro-basis – unlike the administration that wants you to “believe.”
Perhaps the best way to close this compilation of the jobs story is to use a quote by Tyler Durden at Zero Hedge:
We are happy to report that in February, the US economy added a recovery-validating 58,700 waiters and bartenders, the highest monthly increase in this minimum wage category in 18 months.
Surely the recovery is not only upon us, but it is time for the Fed to hike rates, because as the WSJ praised over the weekend, the “Waiter and bartender recovery” has truly arrived. Again.
If everything is getting so much better, why is the fastest growth in jobs based on the drinking habits of America?
The post U-3 drops again – the real story behind the numbers appeared first on The SUA Blog | Stand Up America US.
Source: http://www.standupamericaus.org/economy/u-3-drops-again-the-real-story-behind-the-numbers/
