April Jobs Report: Dueling Data Sets Again
Full-time Jobs Replaced Part-time Jobs add more were added during April
The monthly employment situation report, or Jobs Report, is created using two different data sets: the Current Population Survey (CPS) Jobs and Unemployment Data and the Current Employment Statistics (CES) Worker and Wages data. The two data sets have seasonally adjusted and non-seasonally adjusted components. The seasonal factors change by data set, category, month and year. The seasonally adjusted (SA) and non-seasonally adjusted (NSA) CES data point to growth in all sectors. The CPS data has some differences between the NSA and SA data. The two data sets have been out of synchronization this year during the first four month of the year.
The April Jobs Report painted a picture of Workers Rising, Unemployment Fall and Participation Stalling. The article "April Jobs Report: What On-Coming Storm" detailed how the private sector added over 1 million non-seasonally adjusted workers and reported a gain of 236,000 seasonally adjusted (SA) private sector workers and 263,000 SA Non-farm Payroll (NFP) workers. The "problem" was that we "only" added 393,000 NSA Full-time Time jobs and 124,000 part-time jobs, NSA CPS. The data indicated a much higher value. This meant that we had seasonally adjusted CPS job contraction plus SA U-3 unemployment contraction.
Wages and workers were up month to month and annually for almost all sectors. The article "Wages and Workers Pop during April" reported that all sectors saw non-seasonally adjusted workers increase month to month except Mining and Logging. It also reported how all sectors grew April to April except Information Technology. All sectors saw wages increase month to month and year to year except "Other Services" which saw no change in average hourly wages month to month.
How is President Trump doing compared to his predecessors? President Trump has grown full-time jobs and cut unemployment. This is a significant feat that is being actively ignored. President Trump's first Jobs Report was February 2017. Unemployment is lower now than January 2017 by 2.8 million workers. President Trump has added over 6 million full-time jobs and trimmed 14,000 part-time jobs. Only President Clinton was able to reduce unemployment and grow jobs.
Former Presidents Obama and Reagan had FEWER full-time jobs and more unemployed workers after 27 months in office. Former President Obama's worst month was January 2010, followed by January 2011, January 2012, January 2013, all the way to January 2016. (See "Five Presidents after 96 Months.") January is always the weakest month of a year for any President. President Obama was short 2 million full-time jobs by April of 2011, compared to inauguration day. There were 228,000 more unemployed workers during April 2011 than during January 2009. President Reagan was also over a million full-time jobs in the hole during his third April, April 1983. He also had a much smaller workforce population than former President Obama, 174 million versus 239 million potential workers.
Former President Bush was not doing much better after 27 months in office. Former President George W Bush, GWB, had overseen the creation of 1.1 million part-time jobs and 100,000 full-time jobs. Unfortunately, there were still 1.2 million unemployed workers than when he took office. Participation was up, just not the kind of participation you want to see, and not at the rate of population growth.
Former President Clinton created more total jobs, fewer full-time jobs than President Trump. We have to look at many things when discussing this growth. Former President Clinton started with a higher participation rate than President Trump, 65.57% versus 62.45%. Former President Clinton added 7.2 million jobs versus President Trump's 6.2 million jobs, all full-time. Clinton's mix was 4.2 million full-time jobs and 3.0 million part-time jobs. Former President Clinton reduce unemployment from a higher level of unemployment than President Clinton.
The April Participation rate is barely higher than when President Trump took office. A reduction of unemployed workers reduces participation unless there is a commensurate increase in combined full-time and part-time jobs. The act of cutting unemployment creates negative participants.
We are reducing the number of non-participants. People who are not employed nor unemployed are effectively unemployed. They are "non-participants." The effective unemployment rate compares a fixed point in time with the same month data from other years. This column, and its sister site "Reclaiming Common Sense," have been comparing participation rates and unemployment rates for years. (All data is non-seasonally adjusted)
If we hold the participation rate at 67.04%, the rate we had April of 2000, when the unemployment rate was 3.67%, that U-7 effective unemployment rate, by definition, is 3.67%. The U-7 during April 1983 is 15.17%. The U-7 is 6.45% during April 1995, and 9.64% this month. This is the reason why wage inflation is happening and why we do not feel as if we are at full-employment. We are missing roughly 11 million participants.
This was a strong report, from the CES worker data perspective. Workers jumped. Wages rose. Full-time jobs rose and part-time jobs fell. Unemployment fell dramatically. When workers and wages rise total income rises. When incomes rise then retail sales can surge. If retail sales grow then the Gross Domestic Product (GDP) grows then consumer confidence improves and the economy grows on top of the current growth. Income should rise faster with full-time jobs rather than part-time jobs. Remember that former Presidents Reagan, Clinton GWB, and Obama "earned" re-election with weaker jobs numbers after 27 months in office.
It's the Economy.
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