February Jobs Report: Hitting on All Cylinders but Wages

By New Deal Democrat. Originally published at Angry Bear

HEADLINES:

  • +236,000 jobs added
  • U3 unemployment rate down -0.1% from 4.8% to 4.7%
  • U6 underemployment rate down -0.2% from 9.4% to 9.2%
  • Here are the headlines on wages and the chronic heightened underemployment:

    Wages and Participation Rates

  • Not in Labor Force, but Want a Job Now:  down -142,000 from 5.739 million to 5.597 million
  • Part time for economic reasons: down -136,000 from 5.840 million to 5.704 million
  • Employment/population ratio ages 25-54: up +0.1% from 78.2% to 78.3%
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.04 from $21.82 to $21.86,  up +2.5% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
  • December was revised downward by -2,000, and January was revised upward by +11,000, for a net change of +9,000.

    The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mainly positive.

  • The average manufacturing workweek was unchanged at 40.8 hours.  This is one of the 10 components of the LEI.
  • Construction jobs increased by +58,000. YoY construction jobs are up +219,000.
  • Manufacturing jobs increased by +28,000, and after being down YoY for a year, have now turned the corner again and are up +7,000 YoY
  • Temporary jobs increased by +3,100.
  • The number of people unemployed for 5 weeks or less increased by +98,000 from 2,468,000 to 2,566,000.  The post-recession low was set over 1 year ago at 2,095,000.
  • Other important coincident indicators help  us paint a more complete picture of the present:

  • Overtime rose +0.1 from 3.2 to 3.3 hours.
  • Professional and business employment (generally higher- paying jobs) increased by +37,000 and are up +597,000 YoY, an acceleration over the last year’s pace.
  • The index of aggregate hours worked in the economy rose by 0.2 from  106.4 to 106.6
  •  The index of aggregate payrolls -rose by 0.6 from 132.4 to 133.0.
  • Other news included:

  • The alternate jobs number contained  in the more volatile household survey increased by  +447,000 jobs.  This represents an increase  of 1,485,000  jobs YoY vs. 2,,349,000 in the establishment survey.
  • Government jobs rose by +8,000.
  • The overall employment  to  population ratio  for all ages 16 and up rose from  59.9%  to 60.0 m/m  and is up +0.2% YoY.
  • The  labor force participation  rate rose  from 62.9% to 63.0%  and is up +0.1%  YoY (remember, this includes droves of retiring Bsoomers).
  • SUMMARY 

    This was a very good report in almost all respects, including the end of the manufacturing jobs recession, and a slight acceleration in better-paying professional and business jobs.

    The few warts included the fact that none of the broader measures of labor market slack made new lows (although they did decline), and short term unemployment – a leading indicator – has not made a new low in 15 months.

    But most of all, aside from some continued slack, the big shortfall in the economy as experienced by most Americans is the seemingly unending paltry wage growth.  Once again, adjusted for inflation, there has likely been no growth whatsoever in real wages YoY.
     
    Nearly 8 years into an expansion, this ought to be totally unacceptable, and should be ringing alarm bells about what might happen to wages when the next recession inevitably hits.

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    16 comments

    1. Dead Dog

      Thanks for work on this. Shows the war on jobs from offshoring, immigration, working visas, monopoly power, union busting, etc. etc. is going well. For some.

      On topic, latest report from Buffett to his shareholders.

      http://macrobusiness.cmail20.com/t/i-l-uitjvd-ciyithiii-m/

      Long but poignant in what he says:

      Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been
      throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s
      achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on
      earth – Americans have combined human ingenuity, a market system, a tide of talented and ambitious
      immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.

      You need not be an economist to understand how well our system has worked. Just look around you.
      See the 75 million owner-occupied homes, the bountiful farmland, the 260 million vehicles, the hyper-productive
      factories, the great medical centers, the talent-filled universities, you name it – they all represent a net gain for
      Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America
      has amassed wealth totaling $90 trillion.

      And,

      I’m a lucky guy, very fortunate in being surrounded by this excellent staff, a team of highly-talented
      operating managers and a boardroom of very wise and experienced directors. Come to Omaha – the cradle of
      capitalism – on May 6 th and meet the Berkshire Bunch. All of us look forward to seeing you.

      Take something with you when you go, for me, please

      Lucky guy my arse. A grub’s a better term for this predator

      Reply
      1. Moneta

        All wealth is not created equal. Some depreciates much faster than other. Out of this 90 trillion, much is probably a flash in the pan…

        How much energy and resources have gone into generating this 90 trillion? How much energy and resources will be needed just to maintain it?

        Reply
      2. Gman

        ‘Starting from scratch, America has amassed wealth totalling $90 trillion.’

        Pretty impressive, Warren.

        So there’s more to go around than there ever was then?

        Reply
        1. Left in Wisconsin

          Would be curious to see a ‘primitive accumulation’ type analysis of how much of that $90 trillion is the net current value of resources that were already here waiting to be ‘exploited’ and the fortunes that resulted from that exploitation. Also, my guess is a significant portion of that $90 trillion represents assets in other countries controlled by US-based global corporations. What a country!

          Reply
    2. jackiebass

      With the destruction of unions came the destruction of real wage increases. Probably why the so called middle class is shrinking. This is all part of neoliberal economics.

      Reply
      1. Dead Dog

        Many causes for loss of income for all of us, to buy what we need, to achieve ownership of a house, some land, and freedom from the State…

        There’s no ‘economics’ in neoliberalism (shit, had to add it to dictionary (again)), only predation on the poor and the weak

        Reply
      2. BeliTsari

        Yep. Part of Reagan’s Miracle was how the working class disappeared. How $17.50/hr. union members, with benefits morphed into $3.35 Middle Class™ rent-a-cops, nurse’s assistants, or stumbled into the ranks of sub-minimum wage “marketing trainees” and stayed there until they were culled by urinalysis, or replaced by 1099 independent contractors, many with the same deceased person’s counterfeit ID, or off-shored altogether. Making Daimler Benz SUVs or Ikea furniture here… to assuage Democrats’ guilt.

        Funny, how nobody inquired of us. We’ve been awaiting our trickle-down contingency shared-economy gigs for over three decades now? Heck, it’s our tradition. https://www.youtube.com/watch?v=jIfu2A0ezq0

        Reply
    3. funemployed

      You wouldn’t happen to have access to the distribution of the nonsupervisory personnel wages, by chance. If so, is it normalish? Does the median equal the mean? I’m assuming above is the mean.

      Reply
    4. Vatch

      Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.04 from $21.82 to $21.86, up +2.5% YoY.

      Should this be “Average Hourly Earnings”?

      Reply
    5. John k

      … this includes droves of retiring boomers.
      A few years ago I thought we would soon see a growing demand for workers as the number of people reaching 60 jumped nearly 50%… and the number of those retiring is up sharply.
      Nevertheless, the abysmal participation rate is not on account of retiring boomers. Both 55-64, and 64+, cohorts have seen rising participation since recession, many boomers and older can’t afford to retire because crappy 401(k), recession, low interest rates, and poor planning. Falling participation is among most 16-54 cohorts… crappy wages are too low to bring them back into the work force even though they’ve exhausted unemployment.

      Thinking about avg wages… the increasing numbers of retiring /laid off boomers are probably leaving higher wages than avg… if so, and given avg wage is flat, then probably avg wage is rising a bit more that it seems per 16-54 person? And workforce avg age is falling…
      Wonder what fraction of the work force is at min wage, and how this has changed over time.
      Meanwhile retiree income probably falling for years, helping explain elderly good participation.
      Charts at don short, dshort.com

      Reply
    6. Kokuanani

      Nearly 8 years into an expansion

      You forgot to put quotes around “expansion.” Or perhaps add [sic].

      Reply
    7. MATt

      Optimism is driving the economic growth right now. The optimism is going to go down once people start realizing that the democrats and some republicans will prevent the tax cuts from a happening. This will cause the companies that originally planned on investing billions of dollars and hiring millions of people to back out of their commitments.

      Why can’t people see the obvious? The stock market has soared to historic levels when the economic policies are considered of trump. Just let him do his thing and see how it works. We have never had anyone like him as president. Mark Levin seems to hate most of his economic policies. Bernie agrees with some of his policies.

      Let’s give his unconventional approach a shot.

      As far as his budget cuts. I don’t see how any one can be against the cuts to NPR and PBS. After all, all the democrats are trying to delegitamize RT because it gets fund from Russia. I am sure they do not what they same perception to occur over NPR or PBS.

      Reply
    8. Congative Dissonance

      “This will cause the companies that originally planned on investing billions of dollars and hiring millions of people to back out of their commitments.

      Why can’t people see the obvious?”

      Hella fun here, huh?

      Reply
    9. David G.

      Doing an approximate calculation on that $90T and considering 240,000,000 adults, it looks like Buffett’s 75T gives him about 200,000 X the average share of private wealth.

      Reply

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