Jack Dunn - Reclaiming Common Sense

 Cue "Men at Work."


There are many ways to examine the jobs report data. The monthly employment situation report is constructed using two data sets, the Current Population Survey (CPS) data and the Current Employment Statistic (CES) Data. The CPS data measures changes in full-time jobs, part-time jobs, worker population, and unemployed workers. The CES data measures workers. Each has a non-seasonally adjusted (NSA) data set and a seasonally adjusted(SA) data set. The seasonal factors used to convert the recorded NSA Data to the reported SA data change by data set, category, month and year. The CES also have regular revisions to its data with the advance value for July released last week,  as well as the preliminary June data and the "final" May data.


This column writes many articles on the employment situation data. The first article was "July Jobs Report Fireworks" We saw full-time jobs record an increase during July. The same could be said for part-time jobs and the number of unemployed. This means that we recorded an increase in the workforce participation rate. We also saw July workers increase in numbers at a rate greater than July 2013 and slower than July 2015 and July 2016.


The second article written was "Five Presidents at Six Months." This column compared President Trumps first six months of jobs and worker creation with Presidents Reagan, Clinton, Bush 43, and Obama. President Trump has added full-time jobs and trimmed the number of part-time jobs and unemployed workers during his first six months where President Obama oversaw a slight uptick in the number of full-time jobs and an increase in the number of part-time jobs and over 2 million unemployed workers. President Trump has added more workers than President Clinton and almost as many overall jobs. The "Five Presidents" series, and its predecessor "Four Presidents at __ Months" created a new measure of unemployment, U-7 unemployment, which compares the unemployment levels of the current month, and the participation rate, with the same month of prior years. "Full employment," unemployment under 5%, is not the same a at 63% participation rate as it is at a 67% participation rate.


There has been a War on Men not a War on Women. It was during the 2012 Presidential Election that the "War on Women" campaign was created. There was concern that Mitt Romney had "binders full of women."  What was not fully realized at the time was that men had taken the brunt of the recession. Over 10 million men lost full-time jobs at the depth of the recession. Men had added part-time jobs, early during the recession, to partially offset full-time losses. It took until the Summer of 2016 for all of the lost full-time jobs of the Summer of 2007  to be recovered, before they were lost again. The number of jobs created for men have not kept pace with the male workforce population growth, hence the gap between the population growth line and the jobs columns. Only 2.9 million jobs, full-time and part-time, have been created for 11 million new male workers since July 2007 - the peak of the pre-recession jobs market.


Women lost fewer jobs, recovered faster than men.  Women lost only 3.5 million full-time jobs compared to men who lost 10.5 million jobs. Women had recovered all of their lost full-time jobs by the end of 2014, before dipping during January 2015, and expanding from that time forward.Women have added 4.2 million  for 12 million new women workers. They, too, have seen their participation rate drop because there are more new workers than new jobs.


Pay Gap or Jobs Gap? There have been numerous news stories regarding the pay gap between men and women. Women earn less in the Trump White House than men. That was true under President Obama and under candidate Hillary Clinton. There was an article this week about a restaurant that was charging men 18% more for their meals because they were earning 18% more than women - in Australia. Could that wage gap be a jobs gap? Men worked 71.7 million full-time jobs and 7.8 million part-time jobs during July 2007. Women worked 51.5 million full-time jobs and 16.26 million part-time jobs. The story remains the same, the numbers only change, during July 2017. Women account for nearly 132 million potential workers while men account for 123 million workers. There are more female workers and they work fewer full-time jobs than men work and they work more part-time jobs than men work. There are 20 million more men working full-time jobs than women. There are 8 million more women working part-time jobs than men are working.


Full-employment or effectively unemployed? Technically both men and women are working at "full-employment" with U-3 NSA unemployment rates below 5.00%. Technically there are lower unemployment rates for men and women as compared to July 2007. The problem is that  both men and women are participating at a lower rate than they were during July 2007. Men were participating at 74.30% during July 2007 compared to July 2017 and 69.91%. Women were participating at a rate of 59.70% and are now participating at 57.41%.  What is interesting is that the male participation rate improved June to July of 2017 and decreased slightly from July 2016 to July 2017. The opposite occurred for women with a month to month decline in participation and year to year improvement. When the differing participation rates are factored into the unemployment rate men have an effective unemployment rate of 9.97% and women have a U-7 of 8.55%.


We are seeing low inflation because we have "relatively" high level of unemployment. The Phillips curve projects that high unemployment keeps inflation low and low unemployment increases inflationary pressure. One month does not make a trend.  We will have a better handle on the participation situation at the end of the year when male participation tends to hot bottom.Women tend to hit maximum participation during November. The effective unemployment rates are elevated for both male and female workers. The  jobs iceberg has melted for both men and women. We are at record levels of full-time and part-time jobs for men and women. This is good news. This good news is going unreported. Future columns will examine the sector data, the jobs data by age group, and the number of people working multiple jobs.


It's the economy.