One week ago today, the Bureau of Labor Statistics reported 288,000 jobs were added to the U.S. jobs market in April. The unemployment rate fell to 6.3% from 6.7 % in March. (Source: Bureau of Labor Statistics, May 2, 2014.) Even the most optimistic of economists weren’t expecting a jobs creation number this big.
But it’s just the same old story…
When you look closer at the details of the jobs market, the employment picture actually looks terrible.
First and most important, the number of long-term unemployed in the U.S. economy remains very high. As of April, individuals who were out of work for more than six months made up 35% of all unemployed in the jobs market. The longer they are out of work, the harder it will become for them to find another job.
The number of part-time workers in the U.S. jobs market continues to increase. More part-time employees essentially means less personal earnings and, eventually, less consumption.
In April, there were 7.46 million Americans who were working part-time—up from 7.18 million in February and 7.41 million in March. These workers are working part-time because they can’t find full-time work.
Back in early 2008, the number of part-time workers in the U.S. economy was below five million. (Source: Federal Reserve Bank of St. Louis web site, last accessed May 2, 2014.) Yes, we’ve created close to 2.5 million part-time jobs since the Great Recession—that’s the majority of all jobs created since 2008.
Adding to the misery, low-wage employment in the U.S. jobs market continues to soar. In April, more than 30% of the jobs to be had were in low-wage-paying sectors, such as retail trade, food services and drinking establishments, and health care. These three sectors combined added 87,000 jobs.
The poor U.S. jobs market continues to hurt the average American Joe. In 2013, 7.7 million families in the U.S. economy had at least one unemployed family member. In 2012, this number stood at 8.4 million. This represents a decline of only 8.33%. (Source: Bureau of Labor Statistics, April 25, 2014.)
Dear reader, the increasing jobs number we see in the recent data is a step in the right direction. But I can’t stress this enough: the jobs market is still tormented. Like many government statistics, the unemployment numbers are skewed, as they do not include people who have given up looking for work and those who have part-time jobs but want full-time jobs. The underemployment rate, which includes these two important groups of people, still sits above 12%.
Until the U.S. jobs market gets better, you can’t really have economic growth. If individuals don’t have money—or have very little of it—they can’t go out and shop. In the past, the U.S. economy recovered after an economic slowdown for the simple reason that Americans went out and bought goods. But in this economic recovery, the wallets of Americans are still very, very thin…and their jobs aren’t paying them enough for us to have a full-fledged economic recovery.