Where are the new jobs that accompany a robust economy?

According to the U.S. government’s Bureau of Labor Statistics’ job numbers released today, in September 7.9 million people were unemployed, which is 5% of 158 million people with jobs in the U.S. workforce.

U.S. Jobs – Where is the Recovery?

Chart by UnemploymentData.com

Digging a little bit into the government’s employment/unemployment numbers adds color to the report.

U-3: the official unemployment rate

First:  the U-3 number, defined as “total unemployed,” measured as a percent of the civilian labor force. The government defines this as the “official unemployment rate.” In May of this year, the official unemployment rate—seasonally adjusted—was 4.7%. It spent the three months of summer steady at 4.9%, until September where it increased to 5.0%, according to the Bureau of Labor Statistics.

But Look at U-6

The U-6 numbers include just about everybody that the government classifies within the phrase “labor underutilization.” So here is the list of people included in U-6 unemployment:

  • 7.9 million considered to be the total unemployed (which stands in Sept. 2016 at 7.9 million people, or 5.0% of the civilian labor force of 158 million people)
  • 1.8 million people who are marginally attached to the labor force (defined as: those neither working nor looking for work, but indicate they want work and are available for a job and have actually looked for work in the past 12 months). Of this group 553,000 people are what the government calls “discouraged workers”: people who have given a job-market related reason for not currently looking for work; i.e. they’re discouraged.
  • 5.9 million workers who are employed part time for economic reasons (defined as people who want and are available for full time work but have had to settle for a part time job schedule).
U.S. Jobs – Where is the Recovery?

Table: BLS September Jobs Report

The U-6 unemployment number is 9.7% in September 2016. Our calculator totals those numbers as 15.6 million people who want to work at a full time job but can’t find one, given the definitions above.

How many people were put to work in September?

The BLS reports that non-farm payroll employment rose by 156,000 people in September in the United States. You could fill Denver’s Mile High Stadium twice in a single day with that small crowd, by shuttling those 156,000 people in and out in two groups.

U.S. Jobs – Where is the Recovery?

Photo: MileHighReport.com

Professional business services, healthcare, food services/drinking places, and retail trade accounted for 152,000 of those newly filled September jobs. But strong job growth in a robust, growing economy would include substantial gains in manufacturing, mining, energy development, and the services to support all those employed people. Somehow the numbers just don’t seem to add up to a big time recovery.

One thing that the government issues is the labor force participation rate.

According to the Los Angles Times, “The percentage of adults participating in the labor force ticked up last month to 62.9%. That’s the highest since February, although it remained near a 40-year low.”

Defined out of existence

An intelligent resource UnemploymentData.com looked at the government’s labor force participation rate.

“Labor force participation rate- The labor force as a percent of the civilian noninstitutional population.

But further research on the BLS site leads you to this explanation:

  • The labor force participation rate is the percentage of the [civilian non-institutional] population that is either employed or unemployed (that is, either working or actively seeking work).
  • People with jobs are employed.
  • People who are jobless, looking for a job, and available for work are unemployed.
  • The labor force is made up of the employed and the unemployed.
  • People who are neither employed nor unemployed are not in the labor force.

How can you be neither employed or unemployed?  A rational person would think that you had to be one or the other. But according to the BLS definition… long term unemployed people are defined out of existence and therefore are neither employed nor unemployed. They are the roughly 40% of the population that aren’t participating in the labor force.”


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