The Jobs Report Could Have Been Better

by Dish Staff

Monthly Payroll

Annie Lowrey grades today’s report:

Today, the Labor Department said that the economy added 142,000 jobs last month and the unemployment rate fell a tick to 6.1 percent. It’s a fine report, not great, not good, not bad. There’s little evidence of the acceleration in the recovery that economists keep holding their breath for. But there’s nothing to worry about either, especially given that these are provisional numbers that will get revised.

In short, the recovery is a B-minus.

Neil Irwin’s synopsis:

This report is like a sitcom showed on the in-flight screen on a flight to Chicago: It is certainly not good, but it is far from offensive. It just is.

Jared Bernstein thinks the report is “enough to remind us we’re not at all out of the woods yet”:

August’s lousy report notwithstanding, we are solidly in the midst of a moderate jobs recovery. Payrolls are reliably growing at a pace slightly north of 200K per month. That’s neither a breakneck nor a dismal rate of job growth, but it does mean that given the existing extent of remaining slack in the job market, full employment is still years, not months, away.

Vinik reminds everyone that this is “only one report and those numbers will be revised twice more”:

A better way to look at job growth is through the three-month moving average. When you look at it that way, you can see that the economy still has taken a slight step forward in the past few months, but Friday’s report is clearly disappointing.

moving_average

Jim O’Sullivan’s analysis:

[T]here has been a tendency for the August data to be underreported initially and then revised up later.  There is certainly no sign of the trend weakening in the latest jobless claims data — or growth indicators in general recently.  Even with the weaker August reading, payrolls gains have averaged 215,000 per month so far this year, up from 194,000 last year.  Gains in the household survey employment measure have averaged 223,000.  That pace is more than strong enough to keep the unemployment rate coming down.  In turn, we expect hourly earnings to start accelerating soon as unemployment continues to decline. That said, the earnings data have remained fairly stable so far.

James Pethokoukis points out that “wages are still a problem, with average hourly earnings up just 2.1% the past year”:

Not that the number should be so surprising. The anemic economy is generating jobs at the top and bottom, not so much in the middle. “Average is over” as economist Tyler Cowen has put it  And data yesterday from the Federal Reserve show that while income rose by 10% for the most affluent 10% of American families in 2010 through 2013, incomes were flat or falling for everybody else.

Drum takes a closer look at the unemployment rate:

The headline unemployment rate ticked down to 6.1 percent, but that’s mostly because of rounding. The real decline was about one-twentieth of a point, from 6.19 percent to 6.14 percent.

What’s worse, even that tiny drop was illusory: the number of employed people in August was virtually the same as in July. The drop in the unemployment rate was due entirely to the fact that 268,000 people dropped out of the labor force. The labor force participation rated dropped from 62.9 percent to 62.8 percent, and that’s what caused the “drop” in unemployment.

Ezra wants Congress to do more:

[T]he job report’s divergence from expectations is pretty marginal — especially considering how unreliable these initial data releases are. What’s more notable is how similar it is to recent jobs reports. The labor market is recovering steadily, but there’s no sign yet of the extended period of 300,000 or 400,000-a-month job growth that would rapidly close the gap between where we are and where we would have been absent the Great Recession.

“The jobs report,” however, is not like the weather. It is not a force of nature, or an impersonal whim of the universe. Congress has taken to waiting anxiously for the monthly jobs numbers and then passively applauding or lamenting them, as if they’re a summer rainstorm. But, in fact, there’s much Congress could do to change them.