Rosy Jobs Report Fails to Mask Economy's Continuing Weakness

By:  Bob Adelmann
05/05/2014
       
Rosy Jobs Report Fails to Mask Economy's Continuing Weakness

Looking past Friday's glowing jobs report headlines from the Bureau of Labor Statistics reveals an economy that is far from robust.

The headlines from Friday’s jobs report from the Bureau of Labor Statistics (BLS) were rosy: Employment rose by 288,000 (exceeding expectations), while the unemployment rate fell by 0.4 percent, ending at 6.3 percent, just above the figure dating back to September 2008.

The talking heads from the administration looked at only those headlines and took credit for the gains. Jason Furman, chairman of Obama’s Council of Economic Advisors, claimed that Congress is standing in the way of even better performance:

The President continues to emphasize that more can and should be done to support the recovery, including acting on his own executive authority to expand economic opportunity, as well as pushing Congress for additional investments in infrastructure, education and research, an increase in the minimum wage, and a reinstatement of extended unemployment insurance benefits.

Parsing the numbers, however, reveals that the labor force participation rate actually dropped by 0.4 percent, down to 62.8 percent. In a healthy economy, people would be actively looking for work while those working would be getting paid more. Neither is happening.

In fact, rather than the gain in jobs reported by the BLS and touted by the White House, the household survey done by the BLS showed that the economy actually lost 73,000 jobs in April. And those jobs allegedly gained in the BLS’s establishment survey were largely part-time or low paying service jobs in restaurants, retail businesses, and bars. Real jobs in manufacturing and housing, on the other hand, have barely increased at all over the past 12 months, according to the BLS. Construction jobs, for example, have increased by only 189,000 over the last year — a scant 15,000 per month.

Earnings, after being adjusted for inflation, have stayed flat, if not slightly negative, over the past 12 months, while the average workweek has remained constant. In a thriving economy, the average workweek would be increasing, along with wages.

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