Reclaiming Common Sense

The June Jobs Report caught some people off-guard. The Current Employment Statistics (CES) worker data showed a huge spike in non-seasonally adjusted (NSA)workers. The Current Population Survey (CPS) data, NSA, recorded a huge spike in full-time jobs, a significant drop in part-time jobs, and a massive spike in U-3 unemployed workers.  The unemployment rate edged higher as more people re-entered the job market. The CPS survey respondents were basically answering that they were looking for work and unable to find it. So far this column has published the following articles:

The wages and workers article found that three sector had not quite recovered to pre-recession, June 2007, levels of workers: Information Technology, Construction, and Manufacturing. These three sectors have been predominantly male worker industries. This series of articles, the "War on (wo)Men" series was created when it was said that Women were not doing well during the recession and the recovery. The irony is that women recovered faster and stronger than men. Women have added full-time jobs and part-time jobs  since 2015. Men  had been in full-time job recovery and part-time job expansion since 2010.

Men have a record level of combined full-time and part-time jobs this June. The peak pre-recession month for all jobs, NSA CPS, was July 2007 You can see from the "Iceberg" or "Mountain" graph that whatever full-time jobs were added during the Summer of 2007 were lost by January of 2007, and that whatever was added during the Summer of 2007 were lost by the Fall of 2007. There was a steep drop in full-time jobs during January of 2006, as well. It took until the Summer of 2016 for all of the full-time jobs lost by men during the "Great Recession" to be "recovered." The weren't "created" as the former administration was touting. What was lost was "found." The problem is that by July 2016 there were only. 279,000 new FT jobs and 2.002 million part-time jobs created for the 10.317 million men who entered the workforce population between July 2007 and July 2016.  There was also an increase of over 400,000 unemployed workers. This means that the workforce participation level increased by 2.7 million participants for 10.3 million potential workers. Jobs were not keeping up with the population growth so the workforce participation rate fell even as the unemployment rate fell. 

Men have added 1.89 million jobs for 12.4 million new workers since 2007.  That said, this month was a strong month for men. Men added 631,000 NSA CPS FT jobs this month while trimming 216,000 PT jobs. They also recorded a jump of 367,000 unemployed workers, workers seeking jobs that could not find jobs. 

Women suffered less during the Great Recession and Recovered faster. Women hit bottom between December 2009 and March 2010 when each month they were roughly 3.8 million full-time jobs "lighter" than they were during July 2007. Women had fully recovered by February 2015. The Jobs mountain started growing faster for women, and it grew on the basis of full-time jobs and part-time jobs.

Women have added 4.5 million full-time jobs and over 700,000 part-time jobs since July 2007. The problem here is that the level of women workers in the workforce population has increased by 13.3 million potential workers.

Both Men and Women have fewer unemployed workers and lower unemployment rates than they had during June 2007, or do they? The U-3 unemployment rate during June 2007 was 4.70% for men and 4.77% for women, NSA. That was considered to be "full-employment" because the unemployment rate was under 5%. This month the male unemployment rate was 4.11% and women clocked in at a mere 3.42%. Under 4% must be "fuller" employment. The problem is that the participation rate for men has dropped from 74.09% to 69.81% during the same time. Women have dropped from 59.52% to 56.61%. The difference in participation is masking the 'true" unemployment rate, or the "effective" unemployment rate. This column calls the effective unemployment rate U-7. The U-7 for men is 9.65% because there are 5.3 million missing workers. The U-7 for women is 8.15% with 3.9 million missing workers. 

Pulling out of the Participation Slide.  There was considerable discussion regarding how former President Reagan and former President Obama where the only Presidents to cut their unemployment rates in half during their time in office. The Problem with this comparison is that by the time Reagan left office his participation rate had climbed from 63.27% to 65.77% while his peak unemployment rate was 11.40% and was 5.99% when he left Office. Obama started with a participation rate of 65.47% and left with a rate of 62.45%. His peak unemployment rate was 10.54% and he left with a 5.34% unemployment rate. Participation matters.

Men and women participate at different rates. Men had a participation rate of 74.09% during June 2007. Now they are trying to crack the 70% level. Women participated at 59.02% during June 2007. When were participating at 57.34% this past June. Both men and women have pulled out of the participation slide. Both should pop a little higher in participation rate and unemployment rate next month. Men work more full-time jobs than women. Women work more part-time jobs than men.It may take as long for President Trump to hit participation rates comparable to former President Reagan as it took President Reagan to achieve them.

The important thing is that the "recovery" is over and the "expansion" is beginning. Weekly wages should improve as full-time jobs grow. Participation should improve as wages improve. There has been "scare talk" of a looming recession either this Summer or next Year, or right before the 2020 elections. Barring an attack comparable to September 11, 2001, and barring a hurricane season comparable to 2005 or 2008, The economic data is improving comparable to what we saw under former Presidents Reagan and Clinton. If a recovery is measured from bottom to peak, then this recovery had been on-going since January 2010, and is very long lived. If expansion is measured from when we return to pre-recession levels, this expansion has just begun.

It's the economy.