Recently, the Bureau of Labor Statistics’ (BLS) released the U.S. Employment Summary, which delayed fears of the previous two months weak national reports and leaves much to be accomplished for Americans struggling to get by.
The establishment survey, which surveys “about 554,000 business establishments covering approximately one-third of total nonfarm employment” to determine how many net jobs were added, shows that employers added 192,000 net nonfarm jobs last month across the nation. After revising up the previous two months-which may both may have been affected by winter storms, so far this year the monthly average of 178,000 job gains is lower than the 194,000 average job gains per month last year.
Last month was the first time non-farm private sector employment had surpassed its pre-recession high in January 2008, but there is a long way to go with the adult population increasing by 2 million over the last six years.
The household survey, which surveys roughly 60,000 households that asks the respondent a series of questions to determine whether they are in the labor force and employed, notes a much larger increase in employment of 476,000. But with an increase in the labor force by 503,000 (labor-force participation rate remains near a 35-year low at 63.2 percent), the unemployment rate remained unchanged at 6.7 percent with 10.5 million unemployed.
This is another sign that people have started to look for a job again after years of staying on the sidelines. If the pace of job growth is not sustained, the unemployment rate will rise. If you include those who are underemployed or stopped searching, the unemployment rate is closer to 13 percent-likely a better indicator of the labor market.
The decline in the labor force over the years has artificially lowered the unemployment rate, which makes the employment-population ratio a better labor market measure. This ratio provided a good sign in this month’s report by slightly increasing to 58.9 percent, but it remains below the 63 percent rate before the recession. The typically more stable ratio for the 25 to 54-year-old group increased to 76.7 percent, also far below its pre-recession level of 80 percent, providing further indications of a weak labor market.
A key policy change likely influencing the labor market for the first few months of 2014 is the expiration of extended unemployment benefits. With this now a reality for millions, you might expect individuals to start accepting jobs that pay a lower wage than they were hoping, accepting a part-time job instead of a full-time position, or stopping their search altogether.
This is exactly what happened last month. After part-time non-farm jobs declined by 1 million from June 2013 to February 2014, last month there was an increase of 252,000. This leaves those who would like a full-time job but have taken part-time employment for economic reasons at a rate not seen in decades, and much higher than during most expansionary periods since 1956 (see figure below).
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With weakness indicated by a decline in the average workweek over the preceding two months, last month it increased by 0.2 hours to 34.5 hours, reversing much of the previous declines. Average hourly earnings for all employees on private nonfarm payrolls increased by 2.1 percent over the last year to $24.30.
With mixed signals from this month’s employment report, more gains will come if Congress implemented conservative fiscal policies that encourage economic growth and job creation. This approach has championed previous booms and will work again to better the lives of all Americans, including the neediest among us.
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