On the Job Non-Recovery

The disappointing jobs data this morning, perhaps due to weather, detailed by Bloomberg:

The U.S. jobless rate unexpectedly fell in January to the lowest level in 21 months, while payroll growth was depressed by winter storms.

Unemployment declined to 9 percent from December’s 9.4 percent, the Labor Department said today in Washington. Employers added 36,000 workers, short of the 146,000 median gain projected by economists in a Bloomberg News survey.

As we've detailed for some time the improvement in the unemployment rate is due to the denominator (in the unemployed / labor force equation) dropping off a cliff. The chart below details this phenomenon over the past twelve months according to the household survey. As can be seen, jobs are finally being added (~900 thousand), but during a time when the population of working age individuals in the U.S. grew by ~1.9 million. Add in a drop in the labor force (~420k) and you get ~2.3 million MORE individuals than last year that could be working, not working.



We need to do better than this.

Source: BLS