In what's seen as a massive disappointment, the federal Bureau of Labor Statistics' jobs report came out today and found 74,000 jobs were added to the economy in December. This is way below the number that private forecaster ADP estimated were added in December - 238,000 - and could be a sign that estimates have become very variable in the recovery.
Despite the discouraging top-line number, the unemployment rate dropped three tenths of a percentage point, to 6.7%. The broader U-6 unemployment statistic, which takes into account underemployment, was steady at 13.1%. November's jobs report was revised upwards by 38,000 people as well.
The number of people employed part-time for economic reasons - also known as involuntarily employed part-time - was unchanged in December.
The reason for the dip in unemployment is obvious: 347,000 Americans left the labor force. There could be a number of factors that play into this, including retirements, but a large number of discouraged people left the labor force. The labor force participation rate is now at 62.8% - the lowest since 1978.
http://townhall.com/tipsheet/kevinglass/2014/01/10/jobs-report-the-obama-economy-sputters-along-n1776824?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm
Missing: The American Worker
As Kevin detailed this morning, the economy added just 74,000 jobs last month and the official unemployment rate dropped to 6.7 percent. This drop is a direct result of Americans giving up the search for work. Since President Obama took office in 2009, nearly 10 million people have left the work force and millions more remain underemployed.
The Economic Policy Institute [EPI] has developed a series of charts to visually show how many workers are missing from the labor force and estimated in December 2013 that 5,990,000 workers were missing. When missing workers are calculated into unemployment numbers, the rate is 10.2 percent, nearly four percent higher than the official Labor Department rate.
"In today’s labor market, the unemployment rate drastically understates the weakness of job opportunities . This is due to the existence of a large pool of “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. Because jobless workers are only counted as unemployed if they are actively seeking work, these “missing workers” are not reflected in the unemployment rate," the EPI website states.
Source: EPI analysis of Mitra Toossi, “Labor Force Projections to 2016: More Workers in Their Golden Years,” Bureau of Labor Statistics Monthly Labor Review, November 2007; and Current Population Survey public data series
Millions of potential workers sidelinedMissing workers,* January 2006–December 2013
* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work
Note: Volatility in the number of missing workers in 2006–2008, including cases of negative numbers of missing workers, is simply the result of month-to-month variability in the sample. The Great Recession–induced pool of missing workers began to form and grow starting in late 2008.
Source: EPI analysis of Mitra Toossi, “Labor Force Projections to 2016: More Workers in Their Golden Years,” Bureau of Labor Statistics Monthly Labor Review, November 2007; and Current Population Survey public data series
The unemployment rate is vastly understating weakness in today’s labor marketUnemployment rate, actual and if missing workers* were looking for work, January 2006–December 2013
* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work
Source: EPI analysis of Mitra Toossi, “Labor Force Projections to 2016: More Workers in Their Golden Years,” Bureau of Labor Statistics Monthly Labor Review, November 2007; and Current Population Survey public data series
Most missing workers are of prime working ageMissing workers,* by age and gender, December 2013
* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work
Source: EPI analysis of Mitra Toossi, “Labor Force Projections to 2016: More Workers in Their Golden Years,” Bureau of Labor Statistics Monthly Labor Review, November 2007; and Current Population Survey public data series
"This is comparable to losing the state of Maryland or Missouri in terms of productivity and GDP. We are missing between $250 and $300 billion in lost GDP because of these jobs losses, which is right around 1.5 to 2% of GDP growth. Same number that has been historically missing from Obama's stewardship of the economy," Townhall Finance Editor John Ransom says. "And things are getting worse. The missing workers in August of 2012 were 4.4 million. Now it's 5.9 million. Only 1,374,000 jobs have been created since Dec 2012, while an additional 1,500,000 workers have left the workforce according to the EPI estimate."
President Obama is currently campaigning for "promise centers" around the country, vowing to reduce poverty and to create jobs.
http://townhall.com/tipsheet/katiepavlich/2014/01/10/missing-america-workers-n1777110?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm
http://cnsnews.com/news/article/susan-jones/hiring-slows-december-only-74000-jobs-added-fewest-3-years
http://cnsnews.com/news/article/susan-jones/hiring-slows-december-only-74000-jobs-added-fewest-3-years
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