Every month there are a slew of reports that come out about the same
time as the Bureau of Labor Statistics (BLS) report on unemployment.
This first Friday of the month is a big day for the economy. But the
value in the BLS data isn’t the exact number per se. Its the
consistently of it. It helps the media report something month in and
month out that is easy for the average person to understand, especially
when you compare month to month and year to year. Putting in all kinds
of variables somewhat defeats the purpose, even if its more exact.
This brings me to the U-6. Its a Government report that ties in
everything as related to unemployment, from those working part time,
but want to be working full time, to those that are no longer looking
for work (discouraged). This number more accurately reflects the
availability of jobs, or lack thereof. For May its 16.4% or the highest
its ever been. Since May of last year it has grown 6.6%.
Its not my intention to rain on the parade of the May Jobs report. It
was good, relatively speaking. The number of jobs lost was
significantly lower than the recent prior months. What this number says
is that once you are laid off, its taking awhile to get an adequate
job. This isn’t a surprise to anyone. Its just important to take these
things in steps. First we have to limit the losses, then we have to
make sure it doesn’t slip back again. Then we can start thinking about
job expansion. I expect the U-6, and U-3, number to keep rising for the
next two months. Especially because there is one significant flaw in
it. Areas that are hit hard by downturns are hit really hard, so they
disproportionally affect the U-6. These areas are rarely the first to
turn a corner. Its the areas that don’t have as many of these elements
to begin with that usually lead the nation back.
Working Thoughts 06/09/08
May 2008 Jobs Report and Wages
Working Thoughts 