Free Markets, Free People
Digging into the March unemployment numbers
Not to make to much of them, but this is important to know when you hear some of what is going to pass for analysis today and this weekend. Calculated Risk does a good job of drilling down into the numbers and giving them some context.
First, part timers. The BLS reports:
The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased to 9.1 million in March. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
Calculated Risk adds:
The all time record of 9.2 million was set in October. This suggests the increase last month was not weather related – and is not a good sign.
Again, while any gross positive number is better than a negative number, other areas of employment don’t necessarily support an outlook that says “the job picture is turning around”. As if to emphasize that point, Gallup’s “underemployment” numbers were released today as well and they increased to 20.3% of the US workforce is underemployed – up from 19.8% in February.
A second number to consider is those who’ve been unemployed for over 26 weeks and would work if a job was available:
According to the BLS, there are a record 6.55 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.3% of the civilian workforce. (note: records started in 1948)
The number of long term unemployed is one of the key stories of this recession.
It is the highest number ever recorded since records started in 1948. The previous high was 2.5% in 1983. And, as the cite points out, this is “one of the key stories of this recession” and one that isn’t yet showing signs of improving.
The Wall Street Journal points out:
A survey of private employers shows they shed 23,000 jobs in March in a sign that the labor market remains a mixed bag in an economy that is otherwise growing again.
The private-employer report, which came two days before the Labor Department issues its own, broader job report, was a disappointment to many who were expecting both measures to mark a turning point into positive territory.
Calculated Risk concludes:
Although the headline number of 162,000 payroll jobs was a positive (this is 114,000 after adjusting for Census 2010 hires), the underlying details were mixed. The positives: the unemployment rate was steady, the employment-population ratio ticked up slightly (after plunging sharply), and average hours increased (might have been impacted by the snow in February).
But a near record number of part time workers (for economic reasons), a record number of unemployed for more than 26 weeks, and a decline in average hourly wages are all negatives.
Shorter version: Don’t put too much positive weight on this month’s numbers.
There is a lot that has to change in the markets in general before you’re going to see any significant change in the labor market. So when you hear the talking heads this weekend tell you that it is all turning around and it will be sunshine and roses from now on, take it with a grain of salt.
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