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Today's BLS Employment Situation Report is once again disappointing - details below.
One of the worst ideas conceivable has been suggested by the Administration. Someone has decided that since the GSE’s are making profits it would be a good time to mandate their destruction once again. Read my piece on the National Homeownership Strategy and the idea from the Washington Post to revise it. The National Homeownership Strategy started out as a seemingly good idea but HUD constantly mandated that the GSE’s purchase an ever-increasing portion of bad loans.
The issue is the same as ever. Almost no one in Washington is capable of thinking beyond immediate results. Lowering lending standards may increase housing starts and construction jobs just when we need them to recover from the results of lowering lending standards to increase housing starts and construction jobs.
“Those who cannot learn from history are doomed to repeat it.” – George Santayana
My thanks to Rob Chrisman for bringing this issue up.
Inside the BLS Employment Situation Report
This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which included the 12th of the month.
Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.
- Nominal Nonfarm jobs was +88,000. (E). The two previous months' gains were revised to +268,000 (February) and +148,000 (January). Those had been +119,000 and 219,000. That is a gain (for February and January) of 70,000 from the previous report making the net gain in jobs since the last report of 158,000.
- Real (population
adjusted) job growth in March was 53,000. This accounts for the changes for January and February which were almost as large as the headline +88,000.
- the Unemployment Rate was 7.561% down from 7.736% in
February 2013(B). This decline is not so much due to more people working as it is to people giving up looking for jobs.
- Average hourly earnings was $23.82 up from $23.81 in February 2013 (E)
- Average work week was 34.6 hours up from 34.5 hours February 2013 (E)
- Private jobs were +96,000. Government jobs were -7,000 (E)
-Good producing jobs were +16,000. The two previous months were revised to +41,000 and +37,000. (E)
-The size of the civilian labor force fell from 155,524,000 to 155,028,000 a decrease of 496,000. (H)
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) fell from 63.5% to 63.3%. It was 63.8% a year ago. (H) This, not the unemployment rate, is the number which should get everyone's attention. It is this 63.3% of the adult noninstitutionalized population who get pay checks and contribute to GDP.
- the size of the civilian noninstitutional adult population increased by 166,000 in March to 244,995,000 (H). With a labor participation rate of 63.3% 105,078 more jobs were necessary to keep pace with population growth. We had 53,000 more jobs added than that including the changes from January and February. (H) The Employment/Population ratio was 58.5% down from 58.6% the previous month.
The civilian noninstitutional population is 2,391,000 (H) more than 12 months ago. With a labor participation rate of 63.5% we require 1,518,000 more jobs in the past 12 months to keep pace with population growth. We had 1,268,000 (H) more folks working. The decrease in real (population adjusted) jobs in the past year is 250,000.
According to the 4 week moving average of Initial Jobless Claims, 1,417,000 people lost their jobs in the last 4 weeks. That normalizes to 1,535,000 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is up from the previous month's 1,511,000 jobs lost/month.
In March 2013 BLS measured 4 sets of people entering or leaving the jobs market:
- Job losers and persons who completed temporary jobs was 6,329,000 down 193,000 from February's Job Losers and down 692,000 from March 2012. (H)
- Job leavers was 986,000. This includes anyone who retired or voluntarily left working. This up 30,000 from previous month and down 125,000 from March 2012. (H)
-Reentrants was 3,176,000. Reentrants are previously employed people who were looking for a job and found one. This was -164,000 from the previous month and -88,000 from March 2012.(H)
-New entrants were 1,316,000. These are people who never worked before and who are entering the labor force for the first time. This was -+37,000 from previous month and -105,000 from March 2012.
The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:
- 158,000 more people are working
- 496,000 fewer people are in the civilian labor force
The improvement in the unemployment rate has been due to folks leaving the labor force. The gains in jobs have not kept pace with population growth. We are -250,000 real (population adjusted) jobs for the past 12 months.
Lurking beneath this cold look at numbers is this fact: the U.S. economy is no longer producing jobs for folks who do not have a college degree or recognized trade skills. Jobs performed by those without education or skills are either being automated or offshored. The very large increases in the cost of college education are making education less affordable as it becomes more necessary.
Dick Lepre
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