Pethokoukis, Economics, U.S. Economy

The September jobs report: We waited three weeks for this?

102213jobless

Maybe the federal government should have stayed shut down. If it had, then we wouldn’t have to pick through the lousy September jobs report for some good news. And it isn’t easy. Nonfarm payrolls increased just 148,000 last month, the Labor Department said, less than the 180,000 that Wall Street economists had been expecting.

Now maybe this number will be revised higher.But right now it suggests a decelerating labor market — not one that’s gaining momentum. As economist Justin Wolfers points out, quarterly job growth over the past four quarters has declined from 209,000 (4Q 2012) to 207,000 (1Q 2013) to 182,000 (2Q 2013) to 143,000 (3Q 2013). To put that quarterly number in context: At a 143,000 jobs a month, it would take until 2022 — eight years and 10 months — before the job market returned to pre-Great Recession levels, according to the Hamilton Project’s Jobs Gap calculator.

Not much reason in these numbers for the Federal Reserve to taper its bond buying: Barclays: “In light of the moderate tone of the September employment report, we have pushed out our expectation for the first Fed tapering in the pace of asset purchases to March 2014 from December 2013. We now expect the Fed to finish the asset purchase program in September 2014, later than our previous expectation of June 2014.”

A few other points:

1. While the unemployment rate dipped to 7.2%, the employment rate — that share of the adult civilian population with a job — stayed flat at 58.6%. (See above chart.) It’s barely risen from its recession lows and is exactly where it was in November of 2009.

2. Likewise the labor force participation rate remained unchanged at 63.2%. It if were back at pre-recession levels, the jobless rate would be 11.2%. Factoring out demographics probably gives you a “real” jobless rate in the 9-10% range. Indeed, the broader U-6 unemployment-underemployment rate dipped just a bit to 13.6%.

3. One bit of good news is that the September data suggest that for now at least, Obamacare is not causing a surge in part-time employment at the expense of full-time jobs. Last month, according to the volatile household survey, full time employment was up 691,000, part-time employment down 594,000. So since last December, the economy has created about 1 million full-time jobs vs. a loss of 100,000 part-time jobs. From The Wall Street Journal: ”The uptick in part-time employment earlier this year now looks like a statistical blip: Part-time employment fell in late 2012, then rebounded in early 2013, and has now fallen for two consecutive months.” See the BLS charts below:

102213fulltime

102213parttime

4. We are still a ways off from the 5% unemployment rate Team Obama predicted for September 2013 if Congress passed its $800 billion stimulus plan.

Credit: Barack Obama

Credit: Barack Obama

 

10 thoughts on “The September jobs report: We waited three weeks for this?

  1. I calculated from the just released Household Survey there are 212,000 MORE Multiple Job Holders (in the 3 major categories they break them down in) in Sept than there were in August (NOT seasonably adjusted). Did people WITH jobs “crowd out” new entrants or re-entrants into the labor force? That does not seem to be a “blip”.

  2. I think the last chart is in error. It looks as though the two lines meet on the right. I think it is more accurate to say that, while unemployment was reduced in the short term there is likely to be at least some price paid in the long term. So I expect the unemployment in 2014 and beyond to be a little higher WITH the recovery plan.

  3. Perhaps the growth of part time employment and the decline in full time employment is waiting for the re-imposition of the employer mandate. The previous anomalous blip in part time employment coincidentally ended when the employer mandate was delayed. Funny coincidence that.

  4. The full time employee count starts 1 year prior to imposition of the employer mandate. The first six months of the year saw an increase of just 72K full time jobs – the balance were all part time. As John H states correctly, the part time increase ceased with delay of the mandate. Now that we know what the reaction will be in the field, we can predict another round of full-time to part-time conversion starting in January of 2014.

    Unintended consequences are a hallmark of liberal legislation. That’s called economics to most of us.

  5. Yes, James. We waited 3 weeks for a government employee to hit send for Timmy G’s “Welcome to the Recovery” Dance Party.

  6. Well now that the shutdown is over my grandmother who’s been dead a while can finally go back to the nursing home and not have to eat dog food, and is in no danger of having her corpse thrown over a cliff in a wheel chair!

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