A confounding jobs report today shows that employers dropped 20,000 more Americans from the payroll in January, but the unemployment rate nevertheless decreased from 10% to 9.7%. This is about the worst way a jobless rate can decrease: by people leaving the job market en masse. The key stat:
In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers.
This basically means that a large chunk of people looking for work “left the work force.” It doesn’t mean they all discovered gold or won the lottery, but they simply stopped actively looking for a job and/or saw their unemployment insurance run out. They’re still hurting, they still have no income. They just aren’t “counted” anymore.
The employment numbers for November and December changed as well, revealing a rgood November and a really bad December:
The change in total nonfarm payroll employment for November was revised from 4,000 to 64,000, and the change for December was revised from -85,000 to -150,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.
The “annual benchmark” is a reassessment of the entire year, which revealed around 930,000 more people out of work than previously thought. Other than November, every month was revised downward, with numbers much worse than before.
The report shows continuing pain in the job market, regardless of the baseline jobless rate.
…If there can be said to be good news in the report, it’s that “involuntary part-time workers,” folks who were getting part-time hours for economic reasons, dropped sharply. So employers have been converting part-timers to full-timers rather than hiring new workers. This is good for those part-time employees, and also good that more hours are being worked and the employed generally have more money, but it does little for the unemployed. In fact, with productivity up strong (in other words, businesses are getting more out of less workers by increasing their workload), job growth is simply unlikely in the near term.