PIMCO’s Mohamed El-Erian has a piece up that’s a useful background read on the USA’s employment and unemployment picture. There isn’t anything new in the piece, but its a useful summary.
In answer to my rhetorical question on the post headline, yes, plenty are.
The two indicators that attract immediate attention from the BLS’s monthly Nonfarm Payroll reports are: net monthly job creation and the unemployment rate, which if viewed together and in isolation from he other information releases point to a gradual, steady, and slow improvement in overall labor-market conditions.
But – these headline numbers are not the full picture, there is much detail in the report that paints a much more sobering view:
- The figure for monthly job creation, includes growing numbers in only part-time employment
- It fails to highlight the reality of stagnant earnings
- The headline unemployment rate doesn’t reflect the growing number who have left the work force, shown in the participation rate now falling to a 35-year low
- There is also the duration of unemployment, which is important as the longer one is unemployed, the harder it is to find a well-paying full-time job (In the latest NFP report, the BLS classified 4.3 million Americans as long-term unemployed, which is 37.9% of the total unemployed (and even this doesn’t include all the discouraged who are no longer looking for a job). The more comprehensive employment/population ratio stands at only 58.6%.
- Teenage unemployment “is at an alarming level” of 22.7%
- There is a growing gap between those with a college degree (where the unemployment rate is only 3.5%) and those lacking a high school diploma (11.3%)
- Taken together, “rather than confirming the paradigm of gradual and steady improvement, these disaggregated numbers attest to a highly segmented, multi-speed labor market – one with features that could become more deeply embedded in the structure of the economy”
