Economy: We keep reading in the media that the job market is on fire, that we're near full employment. But it's a sad truth that the monthly jobs report doesn't really reflect what's going on in our hobbled economy.
As everyone knows by now, the jobs data for November show a decline from 4.9% to a 4.6% unemployment rate, as businesses created 178,000 new payroll jobs. What could be better?
While we applaud these improvements, they mask deeper problems with the U.S. job market. As American Enterprise Institute resident scholar Aparna Mathur notes, "You have to look beyond the headline numbers to understand the situation of the American workforce."
Indeed, troubling signs lurk beyond the "headline numbers."
Yes, a 4.6% jobless rate is nice — until you discover that the so-called U-6 gauge of unemployment, which shows the percentage of unemployed plus discouraged and underemployed workers, is 9.3%. That's a full half-percentage point above its level in December 2007, when the economy entered the Great Recession.
For the record, last month another negative milestone was hit: The number of Americans not in the labor force surged by 446,000 to 95.1 million in just one month, to an all-time high. And no, those aren't all "baby boomers retiring," as some insist. In fact, only about 73,000 baby boomers have retired each month since 2010.
Meanwhile, the labor force participation rate continues to fall. It ticked down from 62.8% in October to 62.7% in November, and remains near its 38-year low. The last time the data were in this vicinity was 1978, just as a record surge of baby boomers was entering the workforce for the first time.
Hourly earnings also turned down in November. That's strange, since normally wages rise during a jobs boom, if that's what this is supposed to be. By the way, while hourly earnings rose 2.45% from a year earlier in November, that's still way below the average 3%-plus gains in earnings before Obama. That may be why the number of people holding down more than one job has hit an all-time high.
The often-provocative website Zero Hedge does some interesting math and comes up with this statistic: Since 2014, the U.S. has added 571,000 waiter and bartender jobs, but lost 34,000 manufacturing jobs. If anyone wants to know why Donald Trump went out of his way to save 1,000 Carrier jobs from being moved to Mexico, that Zero Hedge calculation says it all.
So, no, we're not convinced of a jobs boom or anything like it. Given President Obama's poor performance on the jobs front, we'll have to wait for the new White House occupant for that.
Written by Investors Daily Editorial Board