Jack Dunn - Reclaiming Common Sense

 Men are Working Fewer Full-time Jobs now than April 2007, Recovered More during April

The April Employment Situation, or Jobs Report was released this past Friday. The jobs report includes a cornucopia of data that can be analyzed many different ways. There are two data sets. The Current Population Survey (CPS,) or Household Data measure jobs and unemployment, as well as the workforce population. The unemployment rate and workforce participation rate are derived from this data set. The second data set is the Current Employment Statistics (CES) data set, or Establishment Data, which measures workers. Each data set has a seasonally adjusted (SA) component and an non-seasonally adjusted (NSA) component. The seasonal factors used to convert the NSA data to the SA data change month to month and year to year. It is statistically disingenuous to compare data from different months with differing seasonal factors.

The first article published regarding the April Jobs Report was "April Jobs Report Exceeds Some Expectations." We saw non-seasonally adjust full-time jobs surge, NSA part-time jobs tick slightly higher, NSA Unemployment (U-3) decline and the workforce participation rate rise. The second article "Five Presidents, Month Three, Participation Matters" detailed just how good this data was. President Trump has added more full-time jobs during his first three months in office than Presidents Reagan, Clinton, George W Bush, or Obama. President Trump has also overseen the largest reduction in the number of unemployed workers during the first three months of the five Presidents' first three months in office. The third article regarding the Jobs Report reported on how "Ten Sectors saw improvement over their March 2017 Level."It has been an incomplete recovery.

The "Five Presidents" series was inspired by a meme on the Internet. The same could be said regarding the "War on Men" series.  A person on Twitter was tweeting about a "War on Women" during December of 2014. This led to the article "War on Women? Men Lost 744,000 Full-time Jobs during November." Since that time there have been numerous article on this subject, as well as the "Part-time Iceberg" column that was released during March of 2016. Combine these two concepts and you have the new "War on (Wo)Men" series.

It has been an especially incomplete recovery for men. They lost the majority of the full-time jobs during the recession, over 10.6 million full-time jobs compared to 3.8 million full-time jobs lost for women. It took men longer to recover their lost full-time jobs. Men recovered their full-time jobs during the Summer of 2016 and then lost them again at the end of last Summer. Women recovered their lost full-time jobs by the Fall of 2014, two years prior to men.  Meanwhile the population of men workers grew by 11.0 million potential workers and women added 11.8 million potential workers.

Men are not participating at the rate they were during July 2007. Men were participating at a rate of 74.30% at the peak of the jobs market.Men are now participating at a rate of 68.82%. Women did not peak until July 2009. That said, the peak job month was July 2007. Women were participating at a rate of  59.70% during July 2007. Now women are participating at a rate of 56.98%.

Fake News Unemployment rate. It is considered to be full-employment when the U-3 unemployment rate falls below 5%. The problem is that 4.10% unemployment at a Participation rate of   62.72% is not as good as a 4.30% unemployment rate at a participation rate of 65.65%. The same holds true for the unemployment rate by gender. The male participation rate has dropped so much that there are more "missing workers" than unemployed workers. When the missing participants is factored into the male unemployment rate it jumps from 4.14% to a daunting 11.21%. Women suffer a similar plight. There are more missing female workers than unemployed workers.  Their official U-3 rate jumps from a rate of 4.06% to a U-7 of 8.43%.

The good news is that more men and women are participating more this year than last. This coincides with an increase in workers being reported in Manufacturing, Construction, and Mining and Logging.The participation rates for men and women both edged slight;y lower as their populations grew and their unemployment levels dropped. After nine consecutive Summers of declining participation. Men started participating more during July 2016 than July 2015. We will see what July holds in store for men this year.  The participation rate for women is already higher than their July 2016 and November 2016 levels. Women tend to seek peak participation during November.

Will we start seeing wage inflation? There have been a number of articles regarding the changing economy. Some restaurants are automating order taking or bill paying. Some orchards are seeing potential worker shortages due to dropping levels of illegal immigrant workers coming across the border. These orchards are starting to look into automation. Labor shortages, and people who are working on the books versus in the shadows, may spur higher wages. It may also draw some people into the labor market who were "low balled" out of the market by illegal immigrant workers. Higher wages could spur higher spending, as was detailed in yesterday's column, and this could mean people will new more workers to accommodate higher demands.

We have more jobs now than at the pre-recession peak. We also have 20 million more potential workers. We know that we are "missing"  2 million to nine million workers (jobs) based on our participation rate this April compared to April 1981, April 1993, April 2001, or April 2009. Once we eliminate this slack, we will see the economy soar.We have 19 million more workers now than we had during April 2009. We have only added 9.2 Million full-time jobs and 900,000 part-time jobs since April of 2009.President Trump has added 2.5 million of those full-time jobs and 400,000 of those part-time jobs. Things are heating up - think of it as Spring after an eight year Winter.

It's the economy.