Tag Archives: nonfarm payrolls

How Is The Economy Doing?

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There is a lot of concern in some circles about how the war in Iran is impacting certain areas of the American economy. Well, we are starting to get some answers to that question.

On Friday, Zero Hedge reported:

We titled our nonfarm payroll preview post “a substantial bounce” and boy were we right: with consensus expecting a material rebound from February’s negative print (which was revised as usual worse, from -92K to -133K), what the BLS reported instead was a huge beat to expectations of a 65K increase, with March jobs reportedly rising by 178K, the biggest increase since December 2024.

The article continues:

A few additional highlights from the report:

  • The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.8 million in March but is up by 322,000 over the year. The long-term unemployed accounted for 25.4 percent of all unemployed people in March. 
  • Both the labor force participation rate, at 61.9 percent, and the employment-population ratio, at 59.2 percent, both at multiyear lows 
  • The number of people employed part time for economic reasons, at 4.5 million, changed little in March. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
  • The number of people not in the labor force who currently want a job changed little at 6.0 million in March. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
  • Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force increased by 325,000 in March to 1.9 million. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.
  • The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased by 144,000 in March to 510,000. 

The impact of the war in Iran on employment numbers is yet to be seen. The impact on the price of gas at the pump is not appreciated, but hopefully will be in the short range.

Looking Behind The Obvious Numbers

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On Saturday, Trending Politics posted an article about the latest jobs numbers (which are being praised by the Biden administration).

The article reports:

President Biden and other top Democrat leaders have taken a victory lap over the latest jobs report that “soared past expectations” by showing that the U.S. added 336,000 jobs in September. While the Biden Administration has hailed the report as a win for “Bidenomics,” an economist with the Heritage Foundation took to X to explain why the report is actually “very troubling.”

…Heritage Foundation economist E.J. Antoni analyzed the findings further in a lengthy X thread, however, explaining why the report is “very troubling.”

“September nonfarm payrolls jump 336k; Unemployment rate flat at 3.8%; Labor force participation rate remains depressed at 62.8%; Those not in the labor force rose to roughly 5 million more than pre-pandemic – this is artificially pushing down unemployment rate,” Antoni wrote. When adjusting for true labor participation rate, Antoni pegged the actual unemployment rate between 6.3 and 6.8 percent.

…Antoni also pointed out that roughly 22 percent of jobs created came from the government, “an unsustainable increase.”

“Remember that private sector workers have to support those public sector jobs,” he continued.

The economist also noted that every single job created was part-time, pointing out that 1.2 million part-time jobs have been created over the last three months. Full-time jobs actually dropped by 700,000 over the same period, the highest figure since COVID-19 lockdowns.

In addition, double counting of multiple jobholders accounted for 37 percent of supposed gains.

…Antoni concluded by pointing out that the massive increase in part-time jobs is slowing down wage growth. “Lastly, the loss of full-time jobs and their replacement w/ part-time work is helping slow wage growth, which is then negative after adjusting for inflation – real weekly earnings fell dramatically until Jun ’22 and have moved sideways since,” Antoni wrote.

“People [are] supplementing incomes w/ part-time jobs are goosing the headline numbers while underlying economic fundamentals remain weak; people absent from workforce pushing down unemployment rate; earnings not keeping up with inflation; don’t expect the job gains to last.”

It will be interesting to see if this ‘favorable’ jobs report results in the Federal Reserve raising interest rates. The Biden administration is also claiming that inflation is under control–tell that to the people who have recently gone shopping or filled up their gas tank.

Please follow the link to the article. It includes a number of graphs and lots of additional information.