Most people saw the U.S. jobs report numbers on Friday and thought, “this doesn’t make sense.” All the data we’ve been seeing shows that employment continues to be weak and job seekers continue to drop out of the job market.
Monster’s Employment Index for September showed a 2 point decline month-over-month:
That’s a decline in U.S. online job posting activity. This would indicate a slowdown in hiring not a hiring urge of massive proportions.
The Glassdoor Q3 Employment Confidence Survey shows a pretty strong worsening of confidence on the part of job seekers that they’ll find a job in the next six months:
This wouldn’t indicate that job seekers see people around them getting jobs. And 59% of employed people don’t think they could replace their job in six months. Six months!
So what’s the deal with the massive reduction in the unemployment rate from 8.1% to 7.8%? Well, as I wrote here, the official BLS unemployment rate combines data from two surveys conducted by the U.S. government: The Establishment Survey which surveys employers and the Household Survey which surveys thousands of households on a range of topics including employment. The two surveys tell two very different stories in September.
Here’s the Establishment Survey portion of the jobs report from the BLS (U.S. Bureau of Labor Statistics):
Total nonfarm payroll employment increased by 114,000 in September. In 2012, employment growth has averaged 146,000 per month, compared with an average monthly gain of 153,000 in 2011.
So we’re down from the monthly average in both 2011 and 2012. And the monthly average in 2011 was higher than this year’s monthly average. Nonfarm payroll employment increased by 114,000 in September. That isn’t enough to cover the new entrants into the labor force – much less hundreds of thousands of unemployed job seekers.
The Household Survey tells a different story:
Total employment rose by 873,000 in September, following 3 months of little change. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior 2 months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent.
So. Total employment – as reported by individuals not employers – rose by 873,000 in September following “three months of little change.” Despite declining confidence in almost every other survey we see, 873,000 people reported working in September who weren’t working in August. It boggles the mind.
Here’s where those jobs came from:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
Part-timers. 600,000 new part-timers. Part-timers who could be working as little as a couple of hours a week from home. Truly, it boggles the mind.
This is all very confusing. We’re covered over in statistics, trends and data that tell us that the employment picture is stagnant at best. Confidence in the job market continues to decline. And the unemployment rate went down .3% in one month.
I’m with Jack Welch: I can’t connect these dots.
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