The Jobs Report, Sliced and Diced

I’m looking at what’s behind the numbers.

The monthly jobs report data is based on surveys of employers and households – looking at the labor market from two different perspectives. And everything depends on how it is defined. For example, “unemployed” doesn’t mean “not working.” There are a lot of people who are not working for a reason, such as infants, full-time students, retirees, and many others – and the reasons matter.  So here we go.

Nonfarm payrolls rose by 103,000 jobs in March, seasonally adjusted, according to the Bureau of Labor Statistics, based on its survey of about 149,000 businesses and government agencies totaling about 651,000 work sites. As measly as the increase in payrolls was, March was the 90th month in a row of gains, the longest such period in the history of the data.

The job gains in January and February combined were revised down by 50,000 as more survey data became available. Even after those revisions, the gain in both months combined was 502,000. And for Q1, the payroll gains amounted to 605,000.

The monthly data is volatile, jumping up and down and getting revised after the fact. It’s the trends that matter. These trends become more apparent in the 12-month total.

For the 12-month period ended in March, employers added 2.24 million jobs (not seasonally adjusted). This is in the lower-middle of the range since 2012. The chart below shows the 12-month change in payrolls going back to 2000:

The civilian labor force, at 161.76 million people, was up by 1.64 million from March last year (not seasonally adjusted), according to the BLS survey of households.

The labor force consists of the employed and people who are considered “unemployed” of age 16 or over. Those people who don’t have jobs but are not considered “unemployed” are not in this measure of the labor force. For example, kids under 16 are not in it; a college student or a retiree who doesn’t have a job and is not looking for work is not considered unemployed and is therefore “not in the labor force.”

The people who are “not in the labor force.” This is very seasonal. July is always the low point, when students switch from “not in the labor force” to being in the labor force by accepting summer jobs and internships. Much like the labor force, the number of people “not in the labor force” has been steadily increasing. In March, the number of people “not in the labor force” rose by 1.05 million from a year ago, to 95.5 million (not seasonally adjusted).

But the size of the population also changes. So the labor force participation rate tracks the labor force as a percent of the population. This is one of the key measures of the health of the labor market. Note, this is not the total population of the US, but the “civilian noninstitutional population” 16 years or older.

This “civilian labor force participation rate” in March, at 62.9%, was down from February (63.0%) and down from March a year ago (63.0%). The chart below shows the labor force participation rate going back to the peak in 2000 when it was 67.3%. So the rate has moved off the bottom starting in 2016 but remains dismally low:

Discussions have been raging for years why exactly the participation rate is low, and why it deteriorated over the past nine years even as the number of jobs has surged. There is agreement, however, that the labor force participation rate is also impacted by factors other than the labor market, such as demographics: a large number of retiring boomers leaving the labor force, and an even larger number of millennials moving into the labor force. But they alone do not explain the dismal trend.

The broadest measure of the health of the labor market – but also impacted by demographic trends – is the Employment-Population Ratio (the employed as a percent of the “civilian noninstitutional population” 16 years or older. In March, at 60.4%, the rate was up a tad from March a year ago (60.2%), and up sharply from the 58%-range during the employment crisis after the Great Recession. While it has been recovering since 2013, it remains in troublesome territory. At the peak in 2000, it was at 64.7%. The chart shows the devastating impact the last two recessions had, and how each recovery has only been partial:

So how about the “unemployment rate?”

This is one of the thorniest issues – but it’s the most often cited number despite its limited usefulness.

The headline unemployment rate remained at 4.1%, a 17-year low, and the number of “unemployed” ticked down to 6.58 million (from 6.71 million in February). The number of people who’ve been unemployed for 27 weeks or longer fell by 338,008 from a year ago to 1.3 million.

Here are the limitations. This is the number of “unemployed” as a percent of the labor force. As we’ve seen above, “labor force” is strictly defined. And “unemployed” is also strictly defined. To be considered “unemployed,” people in the household survey have to meet these three criteria, according to the BLS:

  1. They had no employment during the reference week;
  2. They were available for work at that time;
  3. They made specific efforts to find employment sometime during the 4-week period ending with the reference week (but persons laid off from a job and expecting recall need not be looking for work to be counted as unemployed).

This is not the only unemployment rate the BLS offers. It offers six measures of “labor underutilization,” as it calls them, ranging from U-1 to U-6.  The headline measure above – the 4.1% “unemployment rate” – is U-3.

The broadest measure is U-6, which is U-3 plus the people who are “marginally attached to the labor force,” plus those employed part time who want to have full-time employment. This U-6 unemployment rate was 8.0% in March, down from 8.8% a year ago. For some people, this is a more realistic measure.

The key part about these unemployment rates is that they’re not absolute measures of unemployment. They were never designed to be that, and shouldn’t be looked at as such. They’re indicators of trends in the labor market: Are the rates going up or down?

As indicators of trends, the unemployment rates work reasonably well. But they fail as absolute measures of unemployment – and yet, that’s the primary role they have now been shanghaied into by the media coverage of the labor market.

The Fed, when considering its monetary policies, takes a fairly broad view of the labor market and is not easily swayed by a single headline number. And it sees nothing in this report that differs significantly from the trend of the past year.

The sixth month of the Fed’s QE-Unwind has now ended. It appears to be on automatic pilot, clicking along at the pace that accelerated in January, despite the sporadic stock market sell-offs since early February. Read…  Fed’s QE-Unwind Proceeds Despite Stock Market Sell-Offs

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

 

  72 comments for “The Jobs Report, Sliced and Diced

  1. kam
    Apr 6, 2018 at 11:15 am

    A better yardstick would be private sector (tax-producing) employment vs. government (tax-consuming) employment.

  2. Colin
    Apr 6, 2018 at 11:23 am

    I’ve read there’s close to 52 million people retired, so around 50 million who aren’t retired, not working and of working age. A very small amount can’t work. The real unemployment rate is much closer to 20% than 4%.

    • Apr 6, 2018 at 12:11 pm

      There are also students, housewives and househusbands, caretakers, the disabled, and a number of other categories of people who are not looking for a “job” (though they may be very busy) and are therefore not “unemployed.”

      • Apr 6, 2018 at 12:49 pm

        There is a lot of inflation in household services. The number of handymen has dropped, perhaps because the IRS makes it difficult to hire non-professional help. The Hispanics all seem to know when to raise their rates, part of that is the effectiveness of the existing immigration laws, (why we need the military, or a wall is a puzzle).
        So when you buy a home, you need to calculate, how much for maintenance, depending on the city (like SF?) People would rather take a job and pay day care for the kids, rather than be a stay at home mom, or mister mom, which means their take home pay takes a hit. The service economy has been a great equalizer and perhaps part of the income disparity gap?

        • kam
          Apr 6, 2018 at 1:02 pm

          I don’t see much argument against existing immigration laws; it is the illegal aliens that are the problem. If the U.S. wants to increase legal immigration, then so be it. But elbowing your way to the front of the line, by pushing out immigrants who have followed the process in the legal, honest manner, should be stopped. Unless, of course, those illegals are your voting block, now and in the future, country be damned.

        • biffula
          Apr 6, 2018 at 2:15 pm

          They wire at least half their income back to their home country while taking advantage of govt. and social programs, that’s why

      • polecat
        Apr 6, 2018 at 8:44 pm

        Would quants figure in that group .. they’re not looking for ‘work’ as polecat might know it, but they seem busy ripping everyone off just the same ..
        Just sayin ..

        • Gerald Smith
          Apr 8, 2018 at 11:32 pm

          Illegal aliens are NOT elgible for gvt. and social programs. That is just plain a lie. But in the age of Trump, lies live forever.

      • JMiller
        Apr 8, 2018 at 12:36 am

        Wolf,

        You are correct. Those “Not in the Labor Force” include not only 38 million retired persons but tens of millions of school students, housewives and disabled persons. Some in the ALT media mistakenly think that all the people in the “Not In The Labor Force” category are unemployed workers and that unemployment rate is really 35 or 40 percent. David Stockman comes to mind as be one of those.

    • Kent
      Apr 6, 2018 at 12:34 pm

      My family is a good example of Wolf’s comment. We have 6 people employed (includes siblings and children) supporting 12 who are not employed. And we all like it that way.

    • paul
      Apr 10, 2018 at 6:52 am

      throw in the birth ,death ratio and you get 22 % unemployment…so the real unemployment number is 18-22%,, the bls uses too much guess work and by the way wages suck ..one trillion in credit card debt proves that.. the nation is in sorry shape with trillion dollar debts all over the place.. too much B.S.

      • Apr 10, 2018 at 8:52 am

        It’s always best to just make up your own numbers that fit your own concept of things :-]

  3. Daniel J Bjorndahl
    Apr 6, 2018 at 11:28 am

    Missed opportunity to draw out the labor force participation rate to the 70s

    • Apr 6, 2018 at 11:48 am

      Happy?

      • BradK
        Apr 6, 2018 at 4:28 pm

        Right on par with the salad days of the glorious Carter Administration.

      • Dan Romig
        Apr 6, 2018 at 4:34 pm

        Would this reflect women taking up work? My Mom is part of that rise in 1972.

        • Apr 6, 2018 at 8:45 pm

          Women entering the work force had a HUGE impact on all employment statistics from the 60s forward.

        • wkevinw
          Apr 7, 2018 at 8:08 am

          Women working more is the main reason.

          The link to the dshort website (see Lance Manly post) shows the weekly earnings adjusted for inflation and hours worked. It’s about the same as 1964 for the non-supervisory workers.

          Also, as discussed on Wolfstreet, the CPI doesn’t adequately account for college and some other costs that people really pay for.

          So the average non-supervisory employee is making less than they were in the early 1960’s.

          That’s not very good.

      • rex
        Apr 9, 2018 at 9:19 am

        Well this chart certainly opened my eyes. Any analysis as to why why the participation rate seemed to increase until the late ’90s and then dropped off?
        rx

        • Apr 9, 2018 at 11:31 am

          The increase is easily explained by women entering the labor market starting just before the beginning of the chart. The hard part is explaining the decrease since 2000.

  4. Apr 6, 2018 at 11:58 am

    Love your columns Wolf, always do. The following IS NOT a criticism of this column :

    You said near the end : “The key part about these unemployment rates is that they’re not absolute measures of unemployment. They were never designed to be that, and shouldn’t be looked at as such. They’re indicators of trends in the labor market: Are the rates going up or down?”

    You go on to say this, “they fail as absolute measures of unemployment . . . . been shanghaied into by the media coverage of the labor market.”

    Well said. But because so many see the “4.x %” headline rate as an absolute indicator, I object strenuously to the numbers we see in the various media outlets, supported by bogus BLS data — not to mention Mr. Trump’s joy at “his” numbers.

    Colin says in a comment above that the real rate is closer to 20%, and I think he is closer to the real number. The real number of unemployed is important in and of itself.

    Our prevaricating government has a reason to misrepresent so many numbers: inflation and unemployment being just two. Misstating those two numbers alone may cause people to be confident of their economic prospects, to the point of setting them up for imminent harm, e.g., our poor savings rate across the broad middle of wage earners, as well as the lower level of wage earners. People will need a savings buffer during the next downturn, and few will have one.

    I read during the last recession that the government had a good reason to allow “underemployed” people to move onto the Social Security disability rolls, which is ( I may be wrong here ) permanent. Lowering reported unemployment for sure . . . .,

    One example will suffice, a bit dated, yet still valid :

    https://www.cato.org/blog/social-security-disability-fraud-puerto-rico

    The number of FULLY ABLE PEOPLE that I know personally, who are collecting Social Security Disability — and at a rate equal to their FULL BENEFIT (that would be given) AT RETIREMENT AGE — is staggering, and also discouraging.

    Unemployment, HEADLINE UNEMPLOYMENT IS 4%, not a chance that is true, and the next recession will lay bare the true unemployment rate, and also the folly of misrepresenting the “real” rate of unemployment, too.

    • Kent
      Apr 6, 2018 at 12:43 pm

      My wife is able-bodied, well-educated and isn’t employed. However, she spends her time caring for our 3 grandchildren, her elderly parents, looking after my youngest in college, working at her church and caring for the poor at our church’s food pantry. Not to mention keeping a fine house and making sure your’s truly is fed. Not everyone needs to be a wage slave.

      My youngest sister appears able bodied but suffers from severe seizures and dystonia. Her doctor says she will probably not live past age 35. She cannot drive and doesn’t have the mental capacity to perform mathematics or perform simple filing jobs, but you would never know that to talk to her. She is on disability and is cared for day and night by my elderly parents. She could not function in the labor force.

      She is the only person that I personally know who is on disability.

      • Apr 6, 2018 at 1:10 pm

        I did say “fully able people” — obviously not including your sister, or a schizophrenic relative I have, who is also on SSDI for life — and I avoided saying this, “fully able people who suffer from ailments such as depression, fibromyalgia, back pain, and other OFTEN imaginary ailments that are psychosomatic in nature” because of the endlessly deep rabbit hole of debate that would ensue. So I definitely DID NOT say that.

        Disability insurance is for disabled people, and I now know two collecting for a truly diagnosable ailment, your sister with dystonia and my close relative disabled with severe schizophrenia.

        I have known many people collecting SSDI for things like this, “I am too depressed to work.”

        Aren’t we all !

        • Brandon
          Apr 6, 2018 at 1:44 pm

          I have an aunt who collects it for anger (she get’s too angry to work). She has been collecting it since her 30’s, and she is close to 50 now.

        • Dave P
          Apr 6, 2018 at 10:05 pm

          My spouse had a severe case of cognitive impairment (2015) that was idiopathic (because medicine still does not really understand the full function of the brain). MRI’s, Cat Scans, multiple visits to many specialists from neurologists to psychiatrists all to no avail. Finally they did what they always do when faced with a neurological deficit they can’t explain and diagnosed her with depression.

          During this time (2015-2017) she collected disability from the company because we both carry long and short term disability. And when I say collected I mean they tried every way imaginable to delay paying and having us fill out more forms and visits in order to delay and screw in the hopes that you would give up.

          The disability company eventually submitted claims to SSDI on behalf of my wife, who was refused. Then came the diagnosis of depression, for which disability insurance will not pay out.

          She still is to this day compromised and not the same person she was prior to the illness. And she now has to work and it is a hell of a struggle for her.

          So I do not know how people game the system, because it failed us miserably and honestly it felt like the system (both SSDI and disability insurance) intentionally try to screw people over and deny them benefits.

          After my ordeal I truly believe it is a very very small amount of people who end up being able to game the system.

        • Gandalf
          Apr 7, 2018 at 3:02 am

          DaveP,

          Re: your wife –

          Actually, there’s a lot more that is known about neurologic diseases and how to diagnose them than you think. But the vast majority of physicians out there in private practice are not smart enough to figure out how to use the existing medical literature to make the proper diagnosis of anything other than common routine diseases. Many of the best diagnostic tools are still research only, and not widely available, much less paid for by health insurance.

          A good example would be the sad story of Robin Williams, who started suffering from a constellation of bewildering symptoms, underwent a battery of tests, and was diagnosed with Parkinson’s Disease. Depressed by his mental deterioration, he hanged himself and it was only on autopsy and looking at his brain cells under a microscope that they discovered that he had Lewy Body Dementia.

          His widow wrote up this poignant account of his medical journey and why it was so hard

          http://n.neurology.org/content/87/13/1308

          A research imaging tool – a PET scan using 11-C labeled Pittsburgh Compound B could have directed his physician towards the fact that he had Lewy Body Dementia, and not Parkinson’s.

          https://www.lbda.org/feature/5203/brain-imaging-for-lewy-body-dementia.htm

          As for how to get disability, it’s a lot easier if you live in a Blue State with a generous social conscience like California. It helps a lot if you worked for the government – city, state, Federal, or military. It helps big time if you suffered a major life threatening injury at work (e.g., I once signed off on Disability papers for a 30 y.o. woman who got clobbered on her head by a large structural beam that fell on her at work. She got a big subdural hematoma in her head which needed to be evacuated emergently and was comatose in the ER.). It helps if you get a sympathetic doctor to sign off on your disability papers.

          Forget the low tax Red States. Private disability insurance are about furthering their bottom line, not helping you get what you paid for. Many get sued for falsely denying disability claims. Check with a disability specialist lawyer if that insurance company has a history of getting sued. Check the fine print – there’s no reason that severe depression, if that is what your wife really has, should not count as a disability. Insurance companies totally like to make stuff up just to deny claims. That’s a fact.

          And, go to the best neurologic academic center you can find to get her better testing. U. Pittsburgh is one, UCLA is another – they are the pioneers of imaging neurodegenerative diseases.

        • Gandalf
          Apr 7, 2018 at 9:09 am

          P.S., In the 1980s I met this couple – the woman was this beautiful tall blonde woman whose first husband had been a San Francisco cop. He had retired on full disability, for “stress”, and was just sitting around at home drinking beer, working occasionally as a Little League umpire. She got tired of that, which is why she got divorced. Her second husband was a great guy. She mentioned that as far as she could tell, about half the cops in the San Francisco police force retired on “stress” disability. It was really easy to get on disability back then in California. It’s probably harder now, but not as hard as in one of these low tax, zero public funds for anything Red States. Later, in the 1990s I remember a part time swim teacher at the local YMCA where we lived in Southern California. She had been an aide at a state psych institution and one of the inmates had attacked her and injured something. So she got on disability. And was now working part time as a swim teacher!
          And there were more stories like that. It was not uncommon to meet people on disability in California.

        • Apr 7, 2018 at 1:24 pm

          Reply to Dave P., and perhaps other as well :

          You ended your post with this, well-supported by your own experience :” . . . I truly believe it is a very very small amount of people who end up being able to game the system.” I believe your account and wish it were truly representative. I am convinced it is not representative.

          Anecdotal accounts — as compelling as it is to employ them — is not as useful and persuasive as proper analysis, with the methodological principals laid out and rigorously applied. But there will always be disagreement as to what is the proper methodology, and how to apply it best.

          Well, this is a paper from a respected think tank — whose analysis cannot be scientifically rigorous — due to an expected government refusal to release very much data for external review.

          However, the paper authors work with the data they do have, and present (what I find to be) “alarming” conclusions about SSDI, its benefit growth, and its sustainability.

          https://object.cato.org/sites/cato.org/files/pubs/pdf/pa377.pdf

          They conclude this :

          [Near the end] “In short, the facts regarding specific SSDI awards are made available to the public in only an incredibly small percentage of cases.

          “Therefore, the above-documented abuses do not even come close to capturing the mass of hidden abuses that occur within the system. In fact, the above-documented abuses represent only the tip of the iceberg of total abuses. To uncover even a few individual cases of abuse in such a minute SSDI sampling . .

          ( page 23 begins

          . . would indicate a serious problem with the
          SSDI system. To have uncovered so many
          such abuses is downright alarming.”

          This conclusion is supported by the data that are released, the payment data, indicating rapid benefit growth, which is outstripping population growth, as well as other parameters.

        • HBGuy
          Apr 8, 2018 at 11:08 pm

          Agreed. Sadly, until Congress has to decide what to do about its impending “bankruptcy” – quotes used because Social Insecurity is itself bankrupt – the public will by and large not be aware of the fraud that caused the problem or the fraudulent nature of the program itself.

        • Gerald Smith
          Apr 9, 2018 at 12:06 am

          I am not on disability but I have fibromalgia and it does keep me from working full time. Shame on you for calling this relentlessly painful exausting condition “imaginary ” or “psychosomatic” and contrary to what you say it is diagnosable. I find you disgusting! I developed it 20 years ago. The first symptom that appeared was that I stoped recovering from my exercise routine at the gym. I would stay fatigued and painful for two weeks rather than recover in two days. When the nodules developed just lightly touching them would cause pain of such intensity that it would make me gasp. It felt like a wasp stinging me It took along time for my doctor to figure out what was wrong with me and years before I got any treamen. I am now on about 5 different drugs and they control the worst of the pain but do nothing for the terrible fatigue. My ability to work was slowly eroded over many years and is pretty limited now, especially combined with congestive heart failure. I fully agree that fibromyalgia lends itself as a psuedodiagnosis to neurotics and hypochondriacs but that doesnt change the fact that it is a real disease that can drive a significant number of people who have t into comitting suicide. But the last person in the world I would choose to decide what kind of illnesses should deserve disability is a heartless hypocrite like you. Maybe you should find out something about it instead of assuming you already know.

    • Setarcos
      Apr 6, 2018 at 1:57 pm

      Great post. We do not measure the impact of employment or the lack thereof on self esteem. This intangible attribute affects many things in a very fundamental way, including social health, economic activity, etc. Unfortunately, this is a hard lesson to learn and impossible to teach. Most seem hard coded to want an economic free lunch. And while I have been guilty of it as well to some extent, it is self-defeating and sets people up to be exploited.

    • safe as milk
      Apr 8, 2018 at 11:50 am

      call me cynical but in an obscene society like ours, i can’t blame people for people for gaming the system to survive.

    • Gerald Smith
      Apr 8, 2018 at 11:39 pm

      Are you suggesting that there are no people who are genuinely disabled and who are genuinely collecting disability? Are you proposing that these people be denied disability benefits because ther eare those abusing the system? I also know of people who are genuinely disabled but are unable to get benefits for incomprehensible deranged bureaucratic reasons. The real issue is that the social security disability system is badly broken and only makes lawyers rich.

  5. Steve clayton
    Apr 6, 2018 at 12:40 pm

    Why do they call it non farm payrolls Lol? What about the farm payrolls?

    • Apr 6, 2018 at 2:07 pm

      “Farming, Fishing, and Forestry Occupations” are down to 992,000

      https://fred.stlouisfed.org/series/LNU02032209

      I’m not sure why they separated these jobs from the rest of the payrolls, but that’s the system we have :-]

      • Paulo
        Apr 6, 2018 at 2:49 pm

        I found this explanation:

        “The variability occurs because of the seasonality in farm jobs.

        The reason why they’re separated in the statistics is largely historical, though still relevant. The BLS was formed in the middle days of the labor movement, back in 1888 when much economic activity was still agrarian. Separating the farm jobs made sense to provide a clearer picture of what was going on in the labor market.”

        https://www.quora.com/Why-are-farmers-excluded-from-nonfarm-payrolls

        • Apr 6, 2018 at 4:05 pm

          Thanks, Paulo!

        • Dan Romig
          Apr 6, 2018 at 4:44 pm

          Yup, when your job is to produce spring wheat, potatoes and sugar beets just outside of downtown Hoople, ND, there ain’t much work to do from Thanksgiving to St. Patricks day.

        • Steve clayton
          Apr 7, 2018 at 2:16 am

          Thanks Paulo, isn’t there seasonality in other areas? Tourism for example, Retail? Regards Steve UK.

      • Bill Smith
        Apr 8, 2018 at 1:30 pm

        Could be because they are not included at a high level of detail in the standard industrial classification system.

  6. Mickey
    Apr 6, 2018 at 12:49 pm

    too bad the govt cannot use the payroll taxes remited reports for developing the jobs report.

    • Hirsute
      Apr 10, 2018 at 12:46 pm

      ^^^^THIS!

  7. Anna
    Apr 6, 2018 at 1:19 pm

    There are a bunch of unemployed men who hang out during the day on my street in a gentrified neighborhood. I think it’s hard for them to find work due to old felony records. So they don’t look.

  8. Rates
    Apr 6, 2018 at 1:45 pm

    Here’s my latest conspiracy theory. They have a program somewhere that takes in the desired interest rate the next quarter, etc, and it will spit out the headline numbers.

    See what Machine Learning can give you?

  9. sierra7
    Apr 6, 2018 at 1:47 pm

    Attempting to “parse” the “unemployment rate” stats.
    Better to use Tarot Cards.
    But, good try to all!

    • polecat
      Apr 6, 2018 at 8:36 pm

      Reading chicken entrials works for certain economic shaman ..
      The Bernanke being one … his predecessor, however was quite the parser of market incantations .. nobody understood what he meant, but cheered him on anyway.

  10. Boots
    Apr 6, 2018 at 2:26 pm

    “Discussions have been raging for years why exactly the participation rate is low, and why it deteriorated over the past nine years even as the number of jobs has surged”

    The jobs being produced are often part-time, temp, no benefits. So after healthcare, car insurance, costs of living (housing!), you’re still losing money by working. Anyone who doesn’t have to work (spouse is a doctor, maybe they have some savings, perhaps they can live in mom’s basement), won’t work since ‘working’ makes little economic sense.

    Oh, and work your ass for a company and they fire you whenever it’s convenient for them. This disposable employee model isn’t everywhere and I hear that Japanese and German workers are actual stakeholders in their companies. Only companies in the US and UK act primarily in the interests of shareholders.

    • Kent
      Apr 6, 2018 at 4:13 pm

      Agree with this comment completely. For many, many people working is a choice. Provide a job with some respect, decent pay and benefits, and lots of people will work. Provide the opposite and a lot of people will choose more fulfilling activities.

      I bigger portion of the population is older today. Lot’s of people have been successful in their lives.

    • Mikey
      Apr 6, 2018 at 4:19 pm

      True and there is little incentive for most young men to start a family when it is likely to lead to paying most of your income after the usual divorce. Videogames keep getting better. Thirty percent are still living with parents. How could a young guy possibly buy a house in the few areas with many jobs when they make twelve dollars an hour.

    • Rejected By Target
      Apr 6, 2018 at 6:05 pm

      Over the years I’ve sought the company of others in my predicament as a method of support (knowing you’re not alone keeps you from going crazy)…they’re educated, more than qualified for work in their fields, over the age of 40, and are now going on their 5th or 6th year without a job. I’m pretty sure that none of us are being counted in the unemployment rate. I finally gave up on ever working in America again, and I now teach English online to Asian students (Koreans in the morning, Chinese on the weekends). Meanwhile, I continue to look at international teaching jobs in the hopes that I can go start a new life overseas.

      There was a recent article about IBM getting rid of their “older workers,” the comments section is a good read as well, https://features.propublica.org/ibm/ibm-age-discrimination-american-workers/

      • Lee
        Apr 8, 2018 at 1:05 am

        Rejected By Target

        FYI: Teaching jobs in Japan

        If you don’t know these two web sites for teaching jobs in Japan here they are:

        https://gaijinpot.com/
        https://www.ohayosensei.com/

        If you are a professional educator, here is another one:

        https://jrecin.jst.go.jp/seek/SeekTop?ln=1

        Now the bad news.

        First your age. If you are in your 40’s or closer to 50, well good luck, but you’ll have lots of competition from the wet behind the years types that are really popular with the burn’em and churn’em.

        Second, your education. You’ll need at least a university degree (doesn’t matter what) to be able to teach in Japan. If you are going for a university position you’ll be competing against people with graduate degrees including those unemployable PhD holders from the USA. You’ll also need papers, books, presentations, and some experience for these types of positions. Some even require basic Japanese ability.

        Third, income. You won’t make a fortune and in most cases you’ll barely get by. Times have changed at all levels from the burn’em and churn’em to the university positions. 250,000 yen a month for a full time job would be ‘good’ at a burn’em and churn’em. A university position might pay 5 million yen a year for someone with experience.

        University positions are now more like wage slaves than academics. Most positions now require you to be on campus every day of the week for a full time position. In addition to teaching 10 to 12 classes a week (1 1/2 hours each) you have to do office hours, meetings, extra work such as entrance exams or school functions plus a little of whatever is needed. Sometimes you might even get a little extra pay, but not often.

        Instead of being given time off when terms were finished you are now required to be on campus all year long and are given vacation days just like regular employee. This eliminates the ability to earn extra income as an adjunct.

        The pay? Well, take a look at the jobs from the first two sites and you’ll see it is quite low. Even university positions for teaching English have fallen to rock bottom levels and remember many of these positions require graduate degrees.

        The days of getting six figure plus income a year for working 6 months a year teaching 6 classes a week from a university are long gone. As many universities still pay based on age and experience, you’ll find that younger is better as it is cheaper for the university.

        As a foreigner the benefits for working at a university vary quite a bit depending on the institution, but many of the allowances given to Japanese Professors will not be given to you. You’ll also more than likely be put on a contract rather than tenure which can range from as short as one year to usually three years will NO renewal upon completion.

        Some benefits you will get are transport allowance and maybe an office. Some universities will give you a couple hundred thousand yen year for research. You most likely will not get a wife allowance, child allowance, housing allowance, supplies allowance and the most important inclusion in private pension scheme from the university.

        The normal retirement plan is usually a lump sum payment of one months’ pay for every year you worked at the university upon retirement. So if your final pay at the Professor level was for example, a low 1 million yen a month then you’d get 25 million yen after 25 years. You’d also get a normal pension if you qualified.

        Taxes. Years ago, Japan was a great place to work as the tax system was more than fair. it no longer is.

        You’ll be subject to national income tax, some type of pension payment, and a medical care tax the first year. After the first year you’ll also get hit with a prefectural and city income tax. (As you probably won’t have income from the first year calculation period in Japan you won’t pay those two.) Many foreigners get hit the second year in Japan with those taxes and are surprised.

        Again, years ago the national health insurance and pension system was really cheap and once you hit the max income level the rates never went up and were pretty good value. The amounts have increased quite a bit over the years.

        On a monthly salary of 190,000 yen at a university you’d pay a whopping 24,000 yen a month of your income for pension and health insurance. On a better monthly income of around 550,000 you’d pay about 70,000 yen a month.

        Medical insurance, IIRC, now only pays 80% of costs for the primary holder and 70% for the others. So don’t get really sick in Japan or you’ll go bankrupt. You should have private medical insurance too.

        And if you spend a lot of time in Japan just beware that should you inherit money or die, you’ll be subject to tax as well and for a period of 10 years AFTER you leave Japan too. (If you get PR or a spouse visa you’ll be subject to them immediately.)

        Housing varies by area and type with 60,000 yen a month a good estimate of what it would cost you for rent.

        Good luck if you are looking for a job in Japan.

  11. raxadian
    Apr 6, 2018 at 5:50 pm

    Funny how the numbers get so bad starting this century, computers and machines sure have taken a lot of jobs.

    And the world population keeps getting bigger…

    Yeah I am sure there is nothing to worry about.

    • Rates
      Apr 6, 2018 at 6:14 pm

      Just in case there’s a war. Human life will always be cheaper than smart machines.

      • raxadian
        Apr 7, 2018 at 12:21 am

        But isn’t war nowadays is done with tons of machines and drones? A guy a thousand miles away orders a guy hundreds of miles away to blow up something using a suicide bomb drone. Soldiers as we knew them in the past century are becoming obsolete.

  12. Chorddog
    Apr 6, 2018 at 6:52 pm

    Wolf, to quote from your post, “So the labor force participation rate tracks the labor force as a percent of the population.” “Note, this is not the total population of the US, but the “civilian noninstitutional population”.
    So, military, and Federal prison are excluded. .
    What about Federal non-military, whose employment, no judgement here, is covered by Federal income tax?
    And how are all of the states’ prison populations treated?
    Does any of this impact the evaluation of trend?

  13. mark
    Apr 6, 2018 at 7:02 pm

    What a fraudulent government … and the rich that it represents. A War Party Of The Rich politburo that callously excludes rent increases from their massaged CPI, and claims 4.x % unemployment, when anybody with half a brain knows its closer to 18-20% .

    To quickly paraphrase Hemingway : “Was there ever a government as much the enemy of its own people as this one?”

  14. TropicalSunset
    Apr 6, 2018 at 7:49 pm

    Anecdotally in my every day life:
    -it seems like every restaurant and store I go to is aggressively marketing that they are hiring
    -I read where owners of trucking companies can not find drivers, especially long haul drivers, some even offering $100k a year
    -every builder and property flipper I know tells me how difficult it is to find subcontractors in the construction trades
    -I read where in midwest states many manufacturers can’t find employees – they fear they cant expand because lack of employees
    -farmers have a lot of trouble finding workers
    -nursing homes and assisted living facilities are paying big bonuses because they can’t find employees
    -apartment vacancies across the country are extremely low and rents having been moving up for years
    -I was reading about an electrician making $200k a year saying he turns down a ton of work…says young folks not going into trades

    I guess I am living on a different planet then the people saying the “real” unemployment rate is 20%. Are those supposed real 20% unemployed actually looking for work? Or sitting on their azz whining drinking a 12 pack? Seems to me everyone I know that wants a job, can get one. And get one pretty easily.

    • Max Power
      Apr 6, 2018 at 9:55 pm

      Even though it’s been explained over and over, those folks still apperantly fail to understand what the headline UE number means… that it only includes those who are unemployed AND are activly seeking work. So, just to make it clear for the 1,000th time, the guy on disability does not count, the dude in the parents’ basement playing video games all day long does not count also, as does the college student living off student loans. Remove these folks from the equation and the unemployment rate is indeed low. Maybe not quite 4% low, but definitely not 20% high if you use the definition of the headline number.

      I can relay the same observations you stated. I personally hire highly skilled technical folks and I can say that it is very difficult to find workers right now. But I also know business owners who hire at the low skilled spectrum of the market and they are too having a really difficult time hiring right now. My family also owns company that owns and leases a bunch of residential real estate properties and in the past couple of years it has been extremely rare for any of them to stay vacant for more than a couple of weeks, if they stay vacant at all, while rents have gone up significantly. The numbers don’t lie – the economy is humming right now. Those who don’t believe it are basically conspiracy theorists who will automatically refuse to believe ANY number if it came from anywhere with the word “Agency” in it. It no use trying to convince them otherwise.

      Now, all this said, is everything just sugar plums and roses? Of course not. And the numbers don’t lie about that either! Just as they don’t with respect to unemployment. While the economy is “strong” much of the apperant economic “strength” is constructed on extremely shaky ground as any one of a myriad of leverage-anywhere-you-look-in-the-system indicators out there can unequivocally attest to.

      Sometimes it seems that there are two types of fools out there. On the one hand you’ve got the ones who insist on ignoring the unemployment statistics, which must be “fake news” since they were produced by the gubbemint. However, at the same time you also got many economic cheerleaders who are themselves ignoring the fact that the S&P 500 CAPE ratio is at 30+. For them it’s time to buy, buy, buy.

      The bottom line is that people are going to believe what they want to believe. That’s the way the world has always worked.

      • TropicalSunset
        Apr 6, 2018 at 10:42 pm

        Good post Max Power. I also stand in between on this matter. If you read sites like this one, Zero Hedge, and many other perma bear type gold bug bloggers, the sky is always about fall. Most perma bears have been on the wrong side of the market for 9 straight years waiting for the market to crash. They will eventually be right, just like the old broken clock right twice a day. I think there are a lot of people that just stay in their houses all day reading permabear blogs to “confirm their biases”, tells them what they want to hear, and never go out and see the real world.

        Now the other side. The permabears core argument for the last 9 yrs is this recovery is all a house of cards based on Fed money printing and zero rates, not based on real fundamentals. You can’t deny that we have never in history seen this type of aggressive monetary policy, so we do not know for sure how it turns out. It may blow up in unforeseen ways. And you cannot deny the Gov’t has a lot of debt and that pensions are underfunded. And you can’t deny the high CAPE ratio and stock buy backs.

        So I’m mixed on all the doom and gloom. I probably lean slightly bearish most of the time. I see some bad things, but I think the permabears may see the employment picture as worse then it is.

    • Colin
      Apr 7, 2018 at 2:36 pm

      The numbers I use are government numbers. I’ve never heard of a government lying to make things look worse, but heard of many instances of lying to make things look better. If anything, the real numbers are more likely to be higher rather than lower. Around 95 million not in the labor force, 6 million unemployed, 160 million working, and 52 million retired. The numbers are easy to calculate.

      We live in a very large country. Yes, some areas are doing okay or even well.

  15. Bet
    Apr 6, 2018 at 9:59 pm

    ageism in tech is big. My hubs a sr software architect laid off two years ago has given up on finding a job. Too many final interviews then no reason. Over 60?
    Forget it. I know of other engineers forced out when older than 55. Younger bro in the same camp and trying to hang on before dumped. I would have been unable to hold a 9 to 5 job because of long term Lyme disease. But go on disability? Never was even a thought in a million years. I just work for myself. Hell. I am clever enough
    Hubs, is doing a pivot working for himself as well. Hard working yankee is supposed to be the American way. Is in my house

    • Lion
      Apr 7, 2018 at 1:37 am

      I was an IT Analyst for many years, laid off just before hitting age 63. Fortunately I was given a good severance package not to litigate the company (lasted nearly a year). Decided to retire at 64 as in my case it was beneficial to do so early. But I feel for those who are sent packing at age 50-60 who are years removed from SS benefits, or any benefits. I have had offers to consult but the IRS tax on SS income removes the incentives for me to do so. My effective tax rate would be 33% on the additional income. So in my opinion, the Fed really doesn’t want retired folks to work. And sadly Corporations don’t want to employ or hire older professionals. A key reason the financial Analysts provided me as to why older professionals were getting moved out was the high cost of medical expense associated with them. The company I worked for was self insured (though I was healthy while working for the company). But statistically I was becoming a financial risk.

      • TropicalSunset
        Apr 7, 2018 at 3:16 pm

        High tech is a BAD industry to get old in. Especially when you are talking about working at tech companies that develop technology (not an IT person at a bank, Ford or Procter and Gamble, etc…). I imagine Google and Amazon probably don’t have a lot of robotics and AI engineers in their 60’s! Working at start ups and top Silicon Valley companies is extremely demanding and the technology constantly changes fast. You become “out of touch” by 35. You are expected to sleep at your desk and work 7 days a week if needed. This works in your 20’s, but not well say over 35. If you work in Silicon Valley, best to save your money so you can ride off into the sunset at 40.

        • Lion
          Apr 7, 2018 at 4:35 pm

          Interesting part of my contract was that I was to stay on for 4 months and train my replacement. Bright guy in his early 30’s. The guy panicked when he when he realized he didn’t have the required Tech skills. I told him to pay attention and take good notes and I’d teach him the tech skills he needed to survive. During Tech Interviews, the IT managers usually can’t tell how technically qualified an applicant is. If a person says they can do the job and they’ve Googled the questionnaires for similar positions and can answer the basic questions, they usually pass.

      • Lee
        Apr 9, 2018 at 9:40 pm

        Get an old age pension in Australia and the effective tax rate can be huge.

        First, if your spouse works you’ll see your pension reduced by 25 cents per dollar for every dollar of income. Same for the person getting the pension – a 25 cent on the reduction after some small allowable amount per fortnight.

        Next, the working spouse will, of course, have to pay income tax.

        So for example, a low income earner making around $35,000 with the other partner retired.

        The retired persons’s pension will be reduced by $8750 immediately.

        Next, income tax. The first A$18,200 is tax free for each person. From A$18201 to A$37,000 you’ll pay 19%.

        So the working person’s income gets a tax bill of about A$3200. You’ll also have to pay a medicare tax which is 2% of gross income, but there are deductions based on total income.

        If the working spouse is under retirement age they don’t get an old age tax credit which IIRC is around A$1200. There is also a low income tax credit of A$400 which both would get.

        So in effect the tax rate on additional earnings is 44%. If the income of the working partner goes above A$37,000 then the marginal effective tax rate is 51%.

        If the working spouse reaches a level of income ($A67,000 or so??) then the retired spouse’s pension will go to zero!!!

        In addition, the government deems you to have income on assets regardless of how much those assets make. IIRC it is something like 1.75% on the first A$83,000 or so and then 3.25% after that.

        So a couple with substantial assets will also see their pension reduced by any income that is deemed to have been earned by their assets.

        (And by the way the same tests are applied if you are unemployed and have lots of assets – you get zip!!!!)

        If the retired spouse works at a job, they can make an additional A$260 per fortnight without any deduction in the pension,but this can only come from a job. Not interest, dividends, capital gains, or self-employment.

  16. Gordy
    Apr 7, 2018 at 11:12 am

    ” read where owners of trucking companies can not find drivers, especially long haul drivers, some even offering $100k a year”

    Pure fantasy. Driving a truck today is indentured servitude.
    It’s a dead end job, that takes more than it gives.

    Most resteraunts pay minimum wage or less (if you’re a waitress). You’re reading the hyped headlines but not reading between the lines.

    Every employer wants slaves (why every tech company uses dependent foreign workers). I would argue there is ALWAYS high demand for people who will work for less than their expenses. Employers are not competing against each other using wages and benefits, they view ‘expansion’ as a joke since all the stats show that we have a demand problem in this country. It’s also a symptom of high overturn in the postiions offered. People try to make it work for a time, or hope for a raise then they quit when they realize it was all just a trap to get cheap labor.

    Employers should include a credit card application as well food stamp and welfare applications with every position.

    • TropicalSunset
      Apr 7, 2018 at 3:11 pm

      Here’s a good very recent WSJ article about Iowa having too many jobs and not enough people. I think Iowa has a 2.9% official unemployment rate.

      https://www.wsj.com/articles/iowas-employment-problem-too-many-jobs-not-enough-people-1522580400

      I’m certainly not an expert on the job market by any stretch. Just going anecdotally on what I hear, see, read. And these could be crappy low paying jobs. Not a large sample size.

      • BirdBrain
        Apr 7, 2018 at 5:52 pm

        Bull. Can’t you see through the smoke and mirrors?
        They want more immigrants.
        They’ve done this before. They put up signs down South luring illegals to Iowa decades ago. They want more!!
        I hope the China tariffs put some of these greedy owners out of biz—end the Corn M@fia!
        P.S. This “phenomenon” isn’t unique to Iowa; it’s common in the Upper Midwest where leftists don’t have a hold!

  17. Apr 8, 2018 at 9:55 pm

    If you tell a company that they will have to pay large benefits to a full-time worker, but not to two half-time workers, why would the company not follow this and split their jobs. Unemployment would then go down. Is there a measure of Full-Time-Equivalents and is that going up or down. I’d guess down in a per capita measure.

    • Apr 8, 2018 at 10:59 pm

      U-6 (underemployment) captures the part-time employed who want to be full-time employed. And it has been going down too.

      All of these unemployment measures (U-1 through U-6, plus others) are based on the household survey, not on the establishment survey. But the number of jobs created is based on the establishment survey.

Comments are closed.