Thoughts on the August Jobs Report
On Friday, the Bureau of Labor Statistics released the jobs report (more formally known as the Employment Situation) for August 2010. The headline numbers were a loss of 54,000 nonfarm payroll jobs and an upward tick in the unemployment rate from 9.5% to 9.6%, which, according to the BLS were “changed little” and “about unchanged,” respectively. Tell that to one of those 54,000 nonfarm payroll workers who lost their jobs or one of the 261,000 workers who reported that they became unemployed during August. Yet, in the very next sentence, the BLS reports that private-sector payroll employment “continued to trend upward” by 67,000. Clearly, there is biased reporting going on at the BLS, but that is not surprising in this administration that has been so hard hit by the jobs issue.
The unemployment rate has been at or above 9.5% for more than a year now, in spite of the administration’s promise that the $787 billion (later revised by the CBO upwards to $852 billion) stimulus plan, would keep unemployment below 8.0%, a target unseen in this labor market since Obama took office. And yet the President boldly claimed “The key point I’m making right now is that the economy is moving in a positive direction.” So we have a President who thinks that falling employment and rising unemployment is “a positive direction.” Heaven help those who are out of work, because is sure sounds like Washington isn’t going to.
Perhaps the most troubling number in the August jobs report is one that largely went unreported. U6, the broadest measure of unemployment reported by the BLS, which includes discouraged workers and part-time workers who would have preferred to work full-time, rose from 16.5% to 16.7%. This translates into 25.7 million workers out of a labor force of 154 million who are unemployed or underemployed. In August, there were 8.86 million workers who reported working part-time for economic reasons, up from 8.53 million in July.
This job market continues to discriminate against men and minorities. From July to August, the unemployment rate among men rose from 10.4% to 10.6% and among Blacks rose from 15.6% to 16.3%. In contrast, the August unemployment rate among women was only 8.6% and among Whites was only 8.7%. Among teenagers age 16-19, a group that is usually the first to lose their jobs during a recession, the unemployment rate rose from 26.1% to 26.3%.
Clearly, education plays a major role in those who do and those who do not have jobs. The August unemployment rate for those with a college degree was only 4.6%; for those with some college or an associate degree was 8.7%; for those with a high school diploma but no college was 10.3%; and for those with less than a high school diploma was 14.0%.
There were a few bright spots in the employment report. The average duration of unemployment declined from 34.2 weeks to 33.6 weeks and the median duration declined from 22.2 to 19.9 weeks. Also, the chronic unemployed—those out of work more than 26 weeks, declined from 6.57 million to 6.25 million. However, it may simply be that these workers gave up hope and exited the labor force.
Don’t worry, though. Our President and his economic team assure us that we are moving in a “positive direction.” Come November, the voters will let the President know how they view his economic stewardship.
