I’ve come to dread the first Friday of every month. It means combing through yet another lackluster jobs report in search of some glimpse of a recovery. Inevitably, I end up disappointed because for months upon months the story has been exactly the same: Jobs are being created too slowly, people are dropping out of the workforce too frequently, and wages growth remains disappointing.
In short, the economy is stagnant and it has been for recent memory. Yet each month I’m forced to report the same thing. It’s like a bad version of Groundhog Day without the comedic touch of Bill Murray. But for what feels like the millionth time, here we go, courtesy of the New York Times’ Binyamin Appelbaum:
“The American economy continues to add jobs in proportion to population growth. Nothing less, nothing more.
The share of American adults with jobs has barely changed since 2010, hovering between 58.2 percent and 58.8 percent. This employment-to-population ratio stood at 58.6 percent in April. That is about four percentage points lower than the employment rate before the recession, a difference of roughly 10 million jobs. In other words, the United States is not getting any closer to recreating the jobs lost during the recession.”
Blech. Inevitably, less seasoned viewers may look to the declining unemployment rate, which ticked down to 7.5 percent, as a sign of stronger hiring. But in this upside-down economy a falling unemployment rate is actually a bad thing because it generally means more people have stopped looking for work, not that people have actually found it.
An incredible 6.7 million people have simply given up looking for work since late 2007 according to economist Heidi Schierholz. Liberals argue that this is simply a result of the general graying of our population as the enormous Baby Boom generation has gotten older and begun to retire. But that isn’t the whole problem, not by a long-shot. As Appelbaum explains. “Participation has actually risen among people older than 55. The decline is entirely driven by younger dropouts.”
Those younger dropouts, many of them recent college graduates like you and I, are at risk of becoming a lost generation that drags down economic growth for years to come. Indeed, a recent study showed that how long you’ve been unemployed is the key determinant for whether or not you get hired. It’s a vicious circle that won’t be broken without significant economic gains.
Unfortunately, there was little in this jobs report that showed strong growth ahead. As Lucia Mutikani reports for Reuters:
“Indeed, the data provided a number of signs of a loss of momentum.
Construction employment fell for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine-month high and a gauge of the overall work effort fell.
. . . While the U.S. economy grew at a 2.5 percent annual pace in the first quarter, data on construction spending, retain sales and trade suggested it ended the period with less speed.
Further, factory data for April imply the economy braked further at the start of the second quarter, a thesis supported by a report on Friday that showed the pace of growth in the services sector in April was the slowest in nine months.”
Despite the pessimism, the economy did create 165,000 jobs in March and revisions to past months added up to 114,000 more jobs than previously counted. All-in-all it is a middling jobs report with lots of bad coupled with a dash of good, which pretty much explains every report in recent memory.
One of these Friday’s I swear I’ll have good news. But the way things are going it may take longer than any of us want.