A week ago today, the Bureau of Labor Statistics (BLS) released its jobs market report for the month of August. To say the very least, there was nothing in that report that says the labor market in the U.S. economy is back on its feet. In fact, the report painted a gruesome image of employment in this country.
In August, 142,000 jobs were added to the U.S. economy—the lowest monthly pace in 2014. And the jobs market numbers previously released for June and July were revised lower. (Source: Bureau of Labor Statistics, September 5, 2014.)
But this is just the tip of the iceberg.
Americans who have been out of work for more than six months continue to make up a significant portion of the total unemployed population—31.2% of all unemployed to be exact. Over the past few years, this number hasn’t really come down much.
What’s worse is that the labor force participation rate, that is the rate of those who are in the working-age population and are looking for work, stood at 62.8% in August. This is the lowest rate of labor force participation in the U.S. economy seen since the late 1970s! (Source: Federal Reserve Bank of St. Louis web site, last accessed September 5, 2014.)
Adding to the misery, and as I have reported many times in these pages, we are seeing more part-time jobs created than ever and job creation remains concentrated in the low-wage-paying sectors, like service and retail.
There’s another problem that doesn’t get much attention. Incomes in the U.S. economy are falling. According to a report by the Federal Reserve, median household income in the U.S. economy fell by five percent between 2010 and 2013—median income was $49,000 in 2010 and in 2013 it was $46,700. (Source: Federal Reserve, September 2014.)
The mainstream and the politicians will try to spin the poor jobs market figure into something more than what it is. They will argue that economic growth is in full throttle in the U.S. economy. Don’t buy into their optimism.
August’s jobs market report just put another negative stamp on the U.S. economy. But have no fear, dear reader; the stock market tells us all is well with the U.S. economy.