Last Friday the Bureau of Labor Statistics (BLS) announced that for the month of March, employers added 162,000 jobs. This would be fantastic news… if it were true.
Let’s have a look at these 162,000 jobs.
Right off the bat, we know that 48,000 of them came from hiring census workers. I won’t completely put this down because these ARE new jobs. But they’re hardly sustainable (the census is a temporary employer) or productive: paying someone to count other people adds literally NOTHING to the US’s manufacturing or productivity base. If it did, we could simply start hiring people to count clouds or trees and have an incredible economy in no time.
So without census workers, we added 114,000 jobs in March.
Then there are the +81,000 via birth/death adjustments. This metric is so complicated that it’s not even worth trying to explain. In simple terms, the BLS tries to adjust the jobs numbers to account for the birth/death cycle of businesses. But the reality is that it is an “X” factor used to downplay job losses and boost job gains.
Without these adjustments, we added 33,000 jobs in March.
Then, of course, there are the weather adjustments. The winter of 2009-2010, was by all counts, a rough one. So the BLS made various adjustments to atone for the fact that for several chunks of 1Q10, people couldn’t even get to work, let alone hire. Now that the winter is over, the BLS is adjusting numbers upwards to make up for former downward revisions. The total number of jobs “created” by adjusting for the nasty winter? 100,000.
Without these adjustments, we LOST 67,000 jobs in March.
So, here we are, three years into the recession (really a Depression) and the only way we can get the monthly employment numbers into positive territory is because of blizzards, economic adjustments, and the hiring of census workers. The fact that we’ve spent trillions and are still losing jobs should tell you everything you need to know about how well equipped the economic advisors to the current administration are to handle this situation.
The employment situation gets even worse when you dig beneath the headline numbers.
For one thing, 9.1 million continue to work part-time for “economic reason.” In plain terms, this means they want full time work, but can’t find it. In January this number was 8.3 million, so this means we’ve added 800,000 people to the “want work, but can’t get it” category in the last two months.
Then of course, there are the 2.3 million who are “marginally attached to the labor force.” The BLS defines this group as individuals who “were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.”
So basically, if you have looked for a job in the last 12 months, but not in the LAST month, you’re “marginally” attached to the labor force. I’m sure the “marginal” relationship provides “marginal” income to meet REAL needs.
Oh, and by the way, there are 200,000 MORE people in this category today than there were one year ago.
Finally, I’ve saved the worst for last: those who lose their jobs are staying unemployed for an extremely long time. All told, 6.5 million people have been unemployed for more than 27 weeks (more than six months). The March number for this group is up 400,000 from February’s 6.1 million. These people ALSO comprise a record number of the total unemployed. Today, 44% of ALL unemployed persons have been unemployed for six months. That’s a record high.
In plain terms, the primary manufacturing going on in the US economy today is occurring on the “accounting” side of things. Real employment continues to drop, people who want work can’t find it, those who lose their jobs remain unemployed for long periods, and Uncle Sam is pretty much the only one who is hiring.
This is hardly cause for celebration, but the market (which was closed on Friday) will likely jump this morning on the report. There is also the Manic Monday effect which I’ve written about numerous times before. So the market will likely move higher today. After that, who knows? The whole thing is detached from fundamentals so it’s all about something breaking down before bearish impulses take effect again.