Reclaiming Common Sense


The August Employment Situation Report, or Jobs Report, was released September 7th. The headline was that we added over 200,000 seasonally adjusted workers. There was some concern that the June and July data were revised lower with the release of this report. Those who are concerned forgot that the June data was revised higher with the release of the July Jobs Report. The release of the data spurred three articles, so far:

  •  "August Jobs Report: Workers Up, Participation Down" analyzed the Current Employment Statistics (CES) Private Sector Worker data and the Current Population Survey (CPS) Jobs data. The article
  • "August Wages and Workers Jump" examined the non-seasonally adjusted (NSA) CES data and found
  • "Five Presidents at 19 months: Full-time Jobs" went back to the CPS data and compared the achievements of President Trump with former Presidents Reagan, Clinton, George W. Bush, and Obama. President Trump has managed to add more full-time jobs than former  Presidents Reagan, Bush, and Obama combined. Part-time jobs have been trimmed and Unemployment is down by 1.8 million workers. Only President Clinton was able to increase full-time jobs and reduced unemployment.

The "Five Presidents" series was started during former President Obama's time in office, as a response to an Internet meme that said that President Obama was the best jobs President since former President Clinton. The "War on (Wo)Men" series, or "Battle of the Sexes" series was inspired by another Internet meme.What was found, early during the reporting, was that there were "Jobs Icebergs" for both men and women. This Iceberg represents the difference between the CPS Jobs level during July 2007, the peak pre-recession jobs month, and subsequent months. What is interesting is that Men lost more full-time jobs than women, at the bottom of the recession, and women have added more jobs than men since the recession. Where do we stand this month?


Men and Women have the most full-time jobs that they have ever had during the month of August. This doesn't mean that they are at the best that they have ever been, with regard to jobs, that happened last month. Jobs tend to peak during July and bottom during January. Men lost over 10 million jobs at the bottom of the recession. Women lost nearly 4 million full-time jobs at the depth of the recession.


Men and women have remarkably low unemployment and lackluster participation rates. If we just examine the data going back to 2005 you can see that there were times that men had a participation rate over 74%. This month the male participation rate was just 69.07% This is the lowest that it has been during the month of August since 2005. We know from the "Five Presidents" article that the overall participation rate is off the generational low recorded during January 2017. The Male U-3 rate/Participation rate graph shows that the U-3 unemployment rate, non-seasonally adjusted, NSA, has fallen as the participation rate has stabilized. The female U-3/Participation graph shows that women have seen their participation rate rebound faster than their male counterparts. They started to see their participation rate rise during 2015, around the same month that they saw their Full-Time-Job "Iceberg" melt


Men and women have not seen as many jobs created as workers have entered the market. This is one of the reasons that the participation rate has fallen as jobs have been created. There are more workers joining the market than jobs are being created. A second reason is that the workforce population is growing faster under President Trump than under President Obama. This time President Trump has been adding more jobs than workers, and trimming unemployment. Trimming unemployment add "negative" workers to the participation data. Men have grown their workforce population by 12.6 million since July 2007 and have only added 3.5 million jobs. Women have seen their workforce population grow by 13.5 million jobs and added 4.4 million jobs over the same period of time.


How many are truly unemployed? Men have a participation rate nearly 4% lower now than August 2007. They have more "missing participants" due to this change in participation than they have unemployed workers. Their NSA U-3 unemployment rate isn't really 3.76%, it is closer to 8.58%. The difference in the female participation rates is not as great as with men.They have 3.22 million unemployed women and another 3.185 million "non-participants." These non-participants are neither officially employed nor officially unemployed. Their effective unemployment rate is closer to 8.12% than it is to 4.25%.


Participation Matters. The number of participants is the same if we have 160 million full-time jobs, 160 million part-time jobs, or 160 million unemployed workers. The participation rate is the number of full-time jobs plus the number of part-time jobs plus the the number of unemployed worker, all combined, and divided by the number of people in the workforce population (PR=(FT+PT+U3)/Population.) We have been in a participation slide. We used to have a "Jobs Iceberg." Men and women have been coming back to work. We have recently been experiencing growth in the Manufacturing Sector, The Mining/Logging Sector, and the Construction Sector.President Trump inherited the lowest participation rate of any President since, and including, former President Reagan. It may take two terms to return the Participation rate to the level with which former President Reagan left office.


The economy is starting to fire on all cylinders. Almost all sectors have as many workers now as they did during 2007, prior to the recession. Retail sales are on track for another record year, and most likely the first ever $6 trillion MARTS retail year. Unemployment is near an all-time low, on a weekly claim basis. We are at historic lows if the change in workforce population is factored into the equation. Men and women have more full-time jobs and lower employment levels than they have had for over a decade. We are missing millions of  participants. This column will address some other measures of the workforce such as Employment and unemployment by age group and the level of multiple job workers.


It's the economy.