U.S. Jobs Market Looks Good On The Surface, But Problems Persist
In November, the headline figures for the U.S. jobs market were solid. Looking into the details, however, suggests some problems still persist.
On December 8, the Bureau of Labor Statistics reported that the U.S. economy added 228,000 jobs in the month of November. In addition, the unemployment rate in the month fell to 4.1%. (Source: “Employment Situation Summary,” Bureau of Labor Statistics, December 8, 2017.)
The mainstream media cheered on this news, and stock investors rushed to buy. We also heard calls for how the U.S. economy is strong and how the Federal Reserve is going to raise rates in the coming week.
These Four Dismal Jobs Market Statistics Shouldn’t Be Ignored
Sadly, there are some problems in the U.S. jobs market that continue to get ignored. Don’t get too fixated on just one month’s figure and call it a win. Instead, look at the long-term trends.
First of all, consider the number of long-term unemployed individuals in the U.S. economy—those who are out of a job for over 27 weeks. There are 1.6 million Americans who are long-term unemployed, and they make up 23% of all unemployed in the United States. This number hasn’t really changed much over the last year.
Why does this matter? The longer an individual remains out of work, the harder it becomes to get another job. They may even lose skills and may require more training.
Beyond this, look at the number of Americans working part-time for economic reasons. These are individuals who are working part-time because they can’t find full-time work. This figure was 4.8 million in November. It is definitely down from a year ago, as well as over the last few years. However, it remains above what it was before the Great recession.
In addition to this, there were 1.5 million Americans in November who were marginally attached to the jobs market. Who are the “marginally attached” Americans? These are individuals who were ready to work and looked for a job in past 12 months, but weren’t counted as unemployed because they didn’t look for a job in the past four weeks.
One more jobs market statistic: in November, there were 7.59 million Americans who held multiple jobs, with 4.28 million of these individuals having both a full-time and part-time job. In other words, for 7.59 million Americans, one job wasn’t enough to cover expenses.
Combining the long-term unemployed, part-time employed, the marginally attached, and those with multiple jobs, close to 15.5 million Americans aren’t really witnessing the “boom” in the U.S. jobs market.
Why Does the Jobs Market Matter So Much?
Dear reader, it really can’t be stressed enough: the U.S. economy is really dependent on consumer spending. If Americans don’t have well-paying jobs, consumer spending struggles, impacting the overall U.S. economic growth.
With 15.5 million Americans still not getting much out of the booming U.S. jobs market, it’s very troubling.
The U.S. jobs market has certainly improved over years, but remains tormented in several ways. It’s certainly worth a close look. A dismal jobs market could be the catalyst that sends the U.S. economy toward a recession.