Given all of the bullish economic news at the end of 2013, expectations were high for a robust December employment report. Wednesday, those expectations were boosted further when payroll processing firm ADP announced that, based on its data, it appeared that the economy added 238,000 jobs in December.
Me? I wasn’t buying it. Virtually no one noticed when, yesterday, polling firm Gallup announced that its data showed that the payroll-to-population ratio actually declined in December. There’s no reason to believe that the employment picture is brightening in the U.S. Our trade picture is as bleak as ever and the labor force continues to grow more out-of-sync with demand as the population rose by another 135,000 in December.
So it should come as no surprise that, this morning, the Bureau of Labor Statistics (BLS) announced that the economy added only 74,000 jobs in December. (See the above link to the report.) That’s the “establishment survey” figure. The “household survey” says that the employment level rose by 143,000. Whichever figure you choose to believe, both are anemic and insufficient to make a dent in unemployment.
Yet, unemployment fell significantly, dropping to 6.7% from 7.0% a month earlier. Why? Once again, the BLS claimed that another 350,000 workers vanished from the labor force. Listening to the radio this morning, the reporter covering the story openly questioned whether the government lies about the unemployment rate. (This was a national radio broadcast, mind you.)
The BLS’s nose grew longer this morning, as evidenced by what I call the “detachment from reality index” – a measure of the difference between the BLS’s unemployment rate and one that holds the size of the labor force at a constant percentage of the population. In December, it ticked up again, to a level just shy of it’s record high two months earlier. Here’s the chart: Detachment from Reality Index. A true measure of unemployment was unchanged in December at 10.3%.
Per capita employment was stagnant in December. Here’s the chart: Per Capita Employment. In fact, it’s unchanged in 14 months and has risen less than 1% since the worst level of the recession.
There’s been a lot of talk about a renaissance in manufacturing. In 2012, manufacturing added 154,000 jobs. In 2013, that fell to 77,000. Both figures are puny in the face of 16 million unemployed workers, of which at least six million manufacturing jobs fell victim to our trade policy.
I don’t see the employment picture brightening any time soon as our trade policy continues to be ignored and as immigration continues to swell the ranks of the labor force.