Reports Blur The Employment Picture In US Economy

Economic Pictured Blurred

Another jobs report and yet another bit of data in which to put a positive spin on. Whether the number is higher or lower than estimates reporters by the droves like to point out how positive the data. At least they make sure to add a positive spin in the title of their articles. But even they are forced in the body or end of the articles to point out the obvious, the data isn't as good as it seems.

Regardless of how many times predictions have been made that the sustained 200K per month job creation is right around the corner, five years in we still do not have it. While the criticisms of the supposed "doomsayers" are dismissed by saying that even a broken clock is right once a day, they can't see themselves in the same light. Even the latest report was only greater than expectations because the expectation had been revised down from 220,000. So when the data comes out at 195,000 and that exceeds the lowered 156,00 data did it really beat the forecast? I would say not, but very few pointed out that the original expectation was the 220,000. The revisions down from previous months are rarely reported but the revisions up are used to support their notion that things are getting better. 

Deep in the data is where the real gloom of the reports lie. There are two reoccurring points in the data that are usually glossed over that symbolize this recovery. They also underpin the argument that this recovery if far from over and the longer this goes on, the worse we fall behind. The first is that 1.6 million of the 3 million of the jobs created since the recession ended (2009) have been in part time workers. We are also creating temporary workers at a rate that exceeds more permanent jobs at many multiples. Not exactly the sign of a jobs resurgence. The vast majority of all these jobs are being created in the service sector, which as many know doesn't even meet the medium household income of the US.

The second and equally important part that is overlooked is that the biggest attributable portion in the drop of the unemployment rate. Millions of people have left the workforce completely, either through retirement or disability causing other financial stresses on the system. Leaving the total workforce participation rate at its lowest levels since the 1970's. The consequences of this should not be overlooked, we have many less people working and paying taxes to pay for the ever growing number of people receiving benefits. The burden that falls to the remaining people to make up the deficit is astounding. Which is why we should expect large budget deficits into the 2020's if not as far as the eye can see.

The endless parade of people willing to overlook these very important pieces will go one for a while. My guess will be at least till a republican becomes president. Then we will be treated to a negative spin on all the data like when the younger George Bush was in the white house and the early 2000's recovery was called a jobless recovery. Wouldn't we like to get those jobless results today, where total employment went up and full time workers made up the greatest part of the work found.