Reclaiming Common Sense

 The February Jobs Report - A Tale of Two Data Sets (Part 3)

The ADP report was released last week to faint praise. The "jobs" number came in at 183,000. Commentators made off-hand remarks that this was down from the January level of 300,000 workers.  We hadn't seen 300,000 ADP Payroll Positions created during a singe month since 2006.  The article "Feb. 2019 ADP Report: Remarkable" detailed revisions matter and how the upward revisions to the 2018 data and the upward revisions to the January ADP data "stole" 209,000 payroll positions from February.

The February Jobs Report Forecast Article projected strong seasonally adjusted worker gains, too. The article "February 2019 Jobs Report Forecast: Big League" examined month to month and February to February changes in the Current Employment Statistics(CES) worker data and the Current Population Survey (CPS) jobs and unemployment data. The question was whether or not the seasonal factors and revisions to the CES data would reduce the February SA Data that is reported. The other question was could we see a spike in NSA CPS jobs similar to February 2018?

We added more jobs that workers during February. The article "Feb. 2019 Jobs Report: 1.2 Million Jobs added or 25,000 Workers" compared the CPS and CES data The non-seasonally adjusted data recorded 670,000 NSA Full-time (FT) jobs added and 532,000 Part-time (PT) jobs added. This was better than February 2014, 2015, and 2016. That was not what was reported.

Workers and Wages improved from February 2018. There were month to month declines in the Mining and Logging (M/L) sector and Construction sector month to month, and a minor drop in Information Technology (IT) February to February. The growth of the workers of 1.93% and the growth in wages of 3.44% means that "spending power" increased by 5.11%.. The article "February Wages and Workers: Wow" goes into more detail.

How is President Trump doing compared to other Presidents after 25 months in Office? President Trump has overseen the addition of 5.8 million full-time jobs during the past 25 months. This compares to a loss of 3.1 million full-time jobs for former President Obama, a loss of 514,000 full-time jobs for former President George W. Bush, and a loss of 2.7 million jobs for former President Reagan. Only former President Clinton added full-time jobs during his first 25 months in office with 3.1 million new full-time jobs.

President Trump has reduced the number of part-time jobs. President Trump has seen the number of part-time jobs drop by 713,000. During the same time former president Obama saw PT jobs rise by 740,000, former President Bush added 766,000 PT jobs, former President Clinton added 3.2 million PT jobs, and former President Reagan added 1.8 million PT jobs.

President Trump and former President Clinton cut unemployment while former Presidents Reagan, Bush, and Obama saw unemployment rise. The data is President Trump down 1.5 million, Obama up 1.5 million, Bush up 2.6 Million, Clinton down 2.5 million, and Reagan up 2.7 million. Unemployed workers are participants. Full-time and part-time workers are also participants. If you cut unemployment, or even full-time jobs, or part-time jobs, you are "cutting participants." The key is to have more participants added to the economy than new workers.

Which would you rather have 63.20% participation with 11.29% unemployment or 63.00% with 4.07% unemployment?  President Reagan had 11.29% unemployment, non-seasonally adjusted, and President Trump has 4.07%. We are not at "full-employment" no matter what you hear elsewhere. The participation rate peaked under President Clinton. The lowest Presidential participation rate for any of the Presidents was recorded January 0f 2016 at 62.34% if you compare the February only data you will find that we are missing roughly 10 million participants.

Population Matters. Part of the reason that President Trump's participation has been low is that the Workforce population is revised every January. President Obama's final January was revised lower by 0.26% and President Trump's first January was revised up 0.26%. You can see that the population lines are revised annually. Former President Obama's population was revised down during January 2010 and January 2011, elevating his participation rate each time. Likewise, former President Bush's participation rate was artificially lowered by boosting his population during January 2003. Former President Clinton saw a similar pronounced spike during January 2000.

What difference does it make? There are some people who are trying to make comparisons to former President Obama's final years in office and President Trump's first years in office. The 24 month comparison was not so great for the former President. President  Trump created a million more full-time jobs during his first 24 months than the former during his final 24 months.

"All Recessions are Jobs Recessions." The Mainstream Media has an obsession with the potential of a MAGA Recession. The thing to remember is that we have to have declining GDP and then two back to back quarters of negative GDP to have a recession.  Right now we have had ten consecutive quarters of increasing GDP growth, even after the Bureau of Economic analysis revised the data back to 1929 last Summer.  We have a record number of February workers working full-time jobs right now. We have fewer people working part-time jobs and more people working full-time jobs than we had last February, February 2018. This is not a jobs recession. This is what jobs expansions looks like.

It is easier to revise the data than it is to revise the narrative. This column has written a number of article regarding the Economic Urban Legends that were perpetuated during the Obama Administration.

  • Unemployment fell below 8% prior to the election. There were three things that supposedly had to happen for former President Obama to be re-elected during 2012:
    • Unemployment had to fall below 8%
    • The Weekly Claims rate had to be under 400,00 claims
    • Gasoline prices had to be under $3.00 a gallon
    • The Participation rate feel. Unemployed workers are participants. There were millions of effectively unemployed workers during 2012 that were told that the economy was recovering and the former President just needed more time.
  • President Obama had the longest Jobs Creation Streak Ever. This was a manufactured streak. It was manufactured through revisions to his data, George W. Bush's data, and manipulating the seasonal factors.
  • President Obama had the longest streak of Seasonally Adjusted First-time Claims data under 300,000 per week. Last year President Trump had the most weeks during a calendar year where the non-seasonally adjusted data was under 200,000 claims.

These Economic Urban Legends need to be dispelled. Unemployment matters. Employment matters, Jobs, full-time jobs, matter. Participation matters. Presidents Reagan, Bush, and Obama were re-elected with much weaker data after 25 months in office.

The next article will cover the recovery of the working male, the surge of working females in the workforce, and the uptick in multiple job workers last month.

It's the Economy.