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The job description of every cabinet secretary includes making the boss—the president—look good. In the wake of the May employment report, Labor Secretary Thomas Perez deserves combat pay. He tried to make the best of a report that wasn’t just bad; it was dismal. All the cosmetics companies in the world don’t have enough lipstick to make this pig look good.
Some of the more depressing facts you might already know. Net new jobs were 38,000—about 13,000 of which were government jobs. Median analyst expectations were for a modest 165,000. Compounding this disaster, job growth numbers for March and April were revised downward by 59,000 and those numbers were anemic to begin with. March and April weak, May atrocious. Is this a trend? For the record, it takes job growth of something like 200,000 per month just to stay even with population growth.
But you’ve got to give Mr. Perez credit for the old college try. The first sentence of the formal report reads: “The unemployment rate for May declined by 0.3 percentage points to 4.7 percent … the Bureau of Labor Statistics reported today.”
“The number of unemployed declined by 484,000 to 7.4 million.” Sure sounds great. Unemployment way down. Lots of people must have found work. Except we know very few people found work. How can this be? Simple. Most of the 484,000 newly unemployed stopped looking for work. When you stop looking for work, you are out of the labor force and no longer counted as “unemployed.” By this logic, if everyone in the United States were out of work because they dropped out of the labor force, we’d have 0 percent unemployment. Better make that 100 percent not employed.
One particularly damning number is buried so deep in the report that we haven’t seen it printed or talked about anywhere: “The number employed part-time for economic reasons increased by 460,000 to 6.4 million.”
Before political correctness muddied up the language, we called these people “employees wanting a full-time job but getting only part-time work”—or the underemployed. In one month, the number of people wanting full-time employment but employed only part time jumped from under 6 million to 6.4 million. That’s a frightening one-month jump. These people are only partially “employed” but are nonetheless counted the same as full-timers.
Almost no net new jobs. Almost a half-million more discouraged non-workers. Almost 8 percent more involuntary part-time workers. Can the Fed possibly hike interest rates?•
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Bohanon is a professor of economics at Ball State University. Styring is an economist and independent researcher. Both also blog at INforefront.com. Send comments to ibjedit@ibj.com.
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