A Roaring Jobs Report

Here is the thing to remember about every jobs report from the Bureau of Labor Statistics:

You have to wait for the revisions.

Remember, the monthly jobs report is a scientific survey of households and employers. That doesn’t mean it’s inaccurate, but for any given survey, there are ways to improve the accuracy and reach a higher degree of precision. Month after month, this is what the BLS does—it tests and adjusts, in order to get the most accurate account of the where the economy stands.

With all of that said, this month was a solid one for jobs; April employment grew by 165,000 jobs, a decent number, though not as good as it should be given population growth and the still-sluggish economy. The number of long-term unemployed declined 258,000 to 4.4 million (around 37 percent of all unemployed Americans). Joblessness dropped to a four-year-low of 7.5 percent.

But more important than this is the revisions. As it turns out, February was the biggest month for job growth in years—the BLS believes that 332,000 jobs were created that month, up from the original estimate of 268,000. The March numbers were also revised upwards, from 88,000 to 138,000. Overall, average job growth for 2013 is 196,000 jobs per month, which is in line with 2012 and 2011. In other words, despite the sturm und drang of economic conditions and public policy, the recovery is on a fairly steady path.

A few things are worth noting. It’s almost certainly true that, without the last two years of spending cuts the recovery would be much stronger. And additional stimulus—like the American Jobs Act—could have given us a further push toward pre-recession conditions. Republicans argue otherwise, but in the current economy, spending cuts hurt much more than they help.

Moreover, the recovery we have hasn’t touched all groups equally. Almost all job growth has happened among people with some amount of college education. To wit, Americans with a high school education or less lost 542,000 jobs over the last 12 months, while their more educated counterparts (those with some college, or a full degree) gained more than 2 million jobs. Working-class Americans have not fared well in the recovery and there’s no sign lawmakers notice—indeed, the large push for comprehensive immigration reform, with a guest worker program, suggests indifference to working-class economic conditions.

On the whole, however, this was a good jobs report. The economy is chugging along, and eventually, we’ll recover fully from the damage of the Great Recession. To sound a more partisan note, this is one reason Democrats should be thankful President Obama won reelection. Under a President Romney, we would have seen a similar—if not identical—jobs report, and he would have gotten credit for changes spurred by Obama’s policies. A Republican Party that gets credit for the recovery is one that wins a decisive advantage in the next few election cycles. As it stands, Obama will get to claim credit, and Democrats may be able to parlay that into another four years in the White House.

Comments

Federal funding for extended unemployment benefits expired at the end of December, and economists are watching the jobs data to see what happens to people who have been out of work for more than six months. That was 3.6 million Americans in January, down from 4.7 million a year earlier. Some may feel more pressure to find and take a job, while others might drop out of the workforce entirely. On the other hand, an improving jobs market could attract people back into the labor force. The employment-population ratio rose to 58.8% in January from 58.6% in December, and the participation rate ticked up to 63% from 62.8%. “An expanding labor force should be viewed as a vote of confidence in the labor market, as previously discouraged workers resume their job search in response to better prospects,” wrote PNC Financial Services Group chief economist Stuart Hoffman in a note to clients. The bottom line: The jobless rate could drop if many people drop out of the workforce, or rise if many people rejoin it.
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