Every month, the Bureau of Labor Statistics (BLS) throws a Rubik’s cube at the public and asks us to solve it. It is called the jobs report. The headline is always the same: a spectacular rate of job creation. And every month, the public reaction is the same: incredulity. Where are these jobs? It’s not obvious.
Each month, the sophistication of these reports has grown such that it is increasingly more difficult to find the problems. We’ve learned to look carefully at the underlying data, while disregarding the press release.
We’ve looked at the growing gap between the two surveys, establishment payrolls vs household numbers. We’ve looked at the types of jobs, part-time or full-time and the specific sectors being affected. We’ve learned to look at the labor participation rates and the labor population rates. We turn to the deep numbers for so-called U-6 or long-term unemployed. We’ve examined what’s called nativity: foreign-born or born in the United States.
It’s not only a Rubik’s Cube but a shell game. You can never anticipate precisely where the data release will hide the bad news. You have to discover that on your own.
The September jobs report was released last week, the last one before the election. Without knowing anything else, you could anticipate that there would be some hidden problem. An easy prediction is that the job creation numbers would be wonderful. Indeed they were, and the corporation press went wild with celebration before forgetting about the report by the afternoon.
This much I promise you: No major financial or economic report shows any evidence of having examined the underlying data. They only reported huge job creation and a decline in the unemployment rate. End of story.
I started digging in right away, and immediately noticed several features. First, nearly half of the new jobs were part-time jobs. Second, government employment made up a substantial number of the new hires. Third, there has been no net job creation among native-born workers, but rather an overall loss of half a million, even as 1.4 million foreign-born workers had been hired.
