Every month we receive a Employment Situation report. That report is released at 8:30 on a Friday morning, normally the first Friday of the month. The analysis is done by 9:00 AM for most analysts and the report is forgotten by 9:00 AM on Saturday. This column invests time, energy, and effort to dig into the data.
What was in the Jobs Report? Friday's February Jobs Report was Remarkable.The data release, the Current Population Survey (CPS) data and the Current Employment Situation (CES) data revealed that job creation (CPS) and worker growth (CES) non-seasonally adjusted, was the best since February 2003 and February 1999, respectively. We saw the number of unemployed workers drop. We saw the workforce participation rise. We even saw the U-6 unemployment number drop. You wouldn't know that this rate is at the lowest it has been during the month of February since 2008. The U-6 data can be found using the tag
LNU03327709 on the CPS website. The U-6 unemployment rate received some attention during the 2012 Presidential Election. The naysayers of the Trump effect found the rain clouds with some of their columns:
Let's compare apples to apples - or at least Presidents to Presidents.Please note that President Obama had a streak of 79 consecutive months over 10% unemployed and had the record of 17.5% NSA U-6 during March of 2010. (Note: U-6 data only goes back to 1994.)
Five Presidents - Jobs, Unemployment Participation. Last month's jobs report for January 2017 was President Obama's 96th job report. Every January the number of workers and jobs fall. This column produced the Article "Four Presidents at 96 months" which detailed that President Obama added fewer participants than Presidents Reagan, Clinton, and Bush," the three most recent two term Presidents. President Obama ended his term in office with the lowest participation rate of the four Presidents. This means that President Trump inherited a historically low participation rate. The Table for the U-6 unemployment number can be found on the CPS website using the search code LNU01300000. What were the four presidents experiencing during month 96?
The Problem is that the historically low participation rate was masking the real unemployment problem. If people are not participating then they are not employed or unemployed. If you are not employed there is a distinct possibility that these people are "effectively unemployed." This effective unemployment rate has been coined "U-7" by this column. It compares unemployment and participation and calculates the "missing participants." If they are missing, they are effectively unemployed and added to the unemployed category. If the participation level of President Obama was the same as Presidents Reagan, Clinton, and Bush then there would have been 7.4 million to 10.9 million more participants, meaning that the U-7 rate would have been between 9.98% and 12.62%.
We are missing millions of participants. The good news here is that while we are missing 1.1 million to 9.6 million participants, we added over 1 million jobs last month, full-time and part-time, non-seasonally adjusted. We have a unique opportunity to compare President Trump's jobs creation and changes in participation with President Reagan's performance. While President Trump has inherited a U-6 over 10%, he has already seen that number drop . While his U-7 may be between 8.41% and 11.38% this is an improvement from last month.
One month does not make a trend. Two months do not make a trend. Three months can provide a trend if all the data points are heading in the same direction. This column has produced rolling year data, and current year data, for other topics and will do so here for the Five Presidents. That rolling year data may come out between May and July.
President Reagan never had a participation rate under 63% It jumped well above 64% during the Summer of 1981. If President Trump's lowest participation rate is 62.73% then he will be an improvement over President Obama. The U-6 table shows that Obama's February Participation has been below 63% since 2013 The last year we had a value of 64% was 2010. The last year we had a value of 65% was 2009.I bet the naysayers will start comparing President Trump to President Clinton and say "Not as good as Clinton at this time during his presidency."It will be too painful for them to compare home to President Obama There are 5.8 million fewer U-3 unemployed workers than when President Obama took office. Crickets.
It's the economy.
President Trump is starting with a comparable participation rate as did President Reagan. The "best February" jobs report revealed that President Trump's participation rate was 62.73%, non-seasonally adjusted. We have more people in the workforce population than under the other four Presidents. We have more full-time employees and more part-time employees.We have fewer "unemployed workers" now than when any other President took office other than President Clinton.
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