Homey is back from vacation with the same mandate. As Yoda would say, “Butt, I will kick. Names, I will take.”
As I write the unemployment report for August has come out. At all too many places, the emphasis will be placed on the unemployment rate, which fell 0.1 percentage point to 6.1 percent. The story might note that the 142,000 jobs added are below the 200,000 that economists expected. And that’s pretty much it.
So I want to burn your newspaper and un-bookmark your worthless website.
With the huge job losses of the Great Recession and weak job creation of the recovery, and most new jobs paying far less than those lost, unemployment is one of the biggest stories. Your editors may be sick of it. Readers are not. At least if you do your job.
Some essentials.
1. The “official” unemployment rate requires context. As this chart shows, it is at a level higher than any similar point in a recovery since data began being collected in the late 1940s. So unemployment remains very high. In the past, this 6.1 percent rate would have been considered a crisis.
2. The Bureau of Labor Statistics has several measures. The most important is the U-6 unemployment rate, which includes discouraged workers and those in part-time jobs who want full-time work. The U-6 in August was 12 percent.
3. Context is also critical for the number of net new jobs created. It takes about 125,000 jobs per month just to keep up with the natural growth of the labor force.
4. The vast job losses of the recession and weak recovery have created a persistent “jobs gap.” Your guide here is the Hamilton Project’s Jobs Gap calculator. For example, if the economy continued to grind out 142,000 jobs per month, it would take until nearly 2020 to make up the losses of the Great Recession. This should be in every story.
5. You can adjust this FRED chart of total non-farm employment to show percent change from a year ago. The result is staggering. Among other things, it shows that job recoveries have been getting weaker since the 1990s.
6. A persistent issue is labor force participation. In August, it fell to 62.8 percent, although that has been fairly stable for the past year. Still, it is the lowest we’ve seen since the 1970s. Some of this is explained by retiring boomers. But there’s also an element of people unable to find work. The monthly JOLTS shows that two job-seekers are chasing every open position.
7. August’s report showed wage growth of 2 percent, where it’s been stuck for years. This tells us that wages remain weak and are not an inflation risk. You can dig into hours worked, too. Are they rising or falling?
8. You can and should slice the data by ethnic, gender and age groups. And make comparisons with other OECD countries. Here’s how Bloomberg showed the critical issue of lack of jobs for prime-age workers.
9. Your state, county and metro data typically come later and have less information. But press the state labor economist or a labor market expert on these issues. The Brookings Institution’s MetroMonitor provides several datapoints for the 100 largest metros, albeit trailing the latest releases.
10. Do mention the sectors that are gaining jobs, but make sure you have some comparisons over time. And dig into the sectors that continue to lose jobs. For example, federal austerity and job losses are a major headwind against recovery. Ronald Reagan aggressively added civilian federal jobs to boost the recovery in the early 1980s. President Obama and the conservative-dominated Congress have not.
As always, one month doesn’t represent a trend. Make sure you are looking at the previous three- and six-month performance. Using some or all of these tips will make your story much more compelling and accurate.
