The BLS Jobs Report Covering April 2014: A Tale of Two Contradictory Reports And Deeply Mixed Messages
The Brief Version
This is a very schizophrenic jobs report. In the seasonally adjusted “official” data, the unemployment rate dropped an amazing four-tenths of a percent to 6.3% but this was accomplished completely by contraction in the labor force (-806,000) and employment actually fell slightly. Read more about The BLS Jobs Report Covering April 2014: A Tale of Two Contradictory Reports And Deeply Mixed Messages
In an April 27, 2014 article entitled Recovery Has Created Far More Low-Wage Jobs Than Better-Paid Ones by Annie Lowrey, the New York Times finally got around to acknowledging what many of us have been chronicling for sometime, the poor quality of jobs created since the end of the recession. Lowrey was writing on a report issued by the National Employment Law Project. Read more about Bad Jobs And Worse Commentary
The Brief Version
The usual seasonal spring rebuild in jobs was delayed a little this year due to the extended and severe winter. In March, some of this ground was recovered making it a particularly good month in seasonal terms. The labor force grew 600,000. This increase was comprised of a 956,000 rise in employment and a 356,000 drop in unemployment. What this means is that for each unemployed person who found work in March, two who were not counted in the labor force at all found work. Read more about The Jobs Report For March 2014: After A Long Winter, The Economy Plays Some Catchup
The Brief Version
Because of yearly revisions, direct December-January comparisons are dicey. I will just note that, in the business survey, seasonally adjusted 197,000 jobs were added December 2012-January 2013 as compared with 113,000 this month, December 2013-January 2014. Keep in mind that anything below 200,000 is weak, and anything below 150,000 is bad. Read more about BLS Jobs Report Covering January 2014: Revisions and Seasonal Lows
The short story is this. In the Household survey, seasonally adjusted unemployment fell an incredible three-tenths of a percent to 6.7% in December. The labor force is around 155 million. 0.3% of that is around 450,000 workers. In fact, it was 490,000. Yet the Business survey reported, also seasonally adjusted, an increase of just 74,000 as compared to the upwardly revised November number of 241,000. Read more about The BLS Jobs Report Covering December 2013: A Bad Report
I decided to break a rule. The BLS says that it is inappropriate to calculate seasonally adjusted wages in constant dollars. But I did so anyway. Real wages in constant dollars allow us to compare wages over time.
Average real wages (blue line) were calculated by dividing nominal weekly wages seasonally adjusted for production and nonsupervisory employees (blue collar workers) by the CPI-U All Items index and multiplying the result by 100. This index is expressed in 1982-1984 dollars and is why the blue line intercepts the nominal wage line in 1984. Read more about What Have Wages Really Been Doing Over the Last 50 Years?
I came across this recently from Obama's stump speech:
Now we’ve added more than 5 million new jobs, more manufacturing jobs than any time since the 1990s. The unemployment rate has fallen from 10 percent to 7.8 percent. Foreclosures are at their lowest in five years. Home values are on the rise. Stock market has doubled. Manufacturing is coming back. Assembly lines are putting folks back to work. That’s what we’ve been fighting for. Those are the promises I’ve kept.”
Last Friday on the 17th, the Bureau of Labor Statistics released its report covering real wages in January 2012. Real wages are inflation adjusted, as opposed to actual nominal wages which can go up even as their buying power decreases due to inflation.
For all employees, real hourly wages, seasonally adjusted, fell 1% year over year from January 2011 to January 2012.
Weekly real take home pay decreased less than this: 0.4%. This was due to a 0.6% increase in the average work week.
This mitigated the effect of the hourly losses, but it also meant that Americans were working more for less and still overall losing ground. Read more about A Quick Note on Real Earnings
Barry Grey of wsws has the grimmest but most reality-based analysis of Obama’s Tuesday night State of the Union message.
The speech was actually one of the most reactionary State of the Union addresses ever delivered. Obama placed his “blueprint” for the US economy within the framework of a chilling celebration of the American military and its criminal activities around the world. Among the achievements he cited were the occupations of Iraq and Afghanistan and the bombing of Libya and murder of Gaddafi. He spoke with particular pride of the extra-legal drone assassinations in Africa and the Middle East and concluded with a paean to the Navy SEALs who murdered Osama bin Laden.
In the 4th quarter of 2010, the seasonally unadjusted median wage for full time wage and salary workers was $752/week. This was up from $748/week in the 4th quarter of 2009 or 0.5%. The bad news is that the Consumer Price Index for All Urban Consumers (CPI-U) which likely understates inflation was up 1.3% in 2010. So the working public actually fell a little further behind in 2010. Read more about Wages, Unions, and Two New BLS Reports
Economics 101 at AP:
Rising productivity means that employers can boost salaries because of workers' increased efficiency. It is the single most important factor supporting rising living standards.
Sure, they can. And weasels could fly out of my butt.
They could also cream off the profits from our harder and harder work for themselves. Which is exactly what's been happening for the last 30 years, as real income has been flat for all but the top 1%. Read more about So, income has been flat for thirty years why?
Tula, Mike and the gang run a great blog, and I need to link to it more often. As the minimum wage bill works its way through the halls of Congress, this post reminded me of a couple of points we need to talk about more:
Opponents of a clean bill to the raise the minimum wageâ€”which is at its lowest buying power in more than 50 yearsâ€”claim that without a multibillion dollar tax break lifeline, the nationâ€™s business community faces economic disaster. We are not the only ones who say that is balderdash.