The Bureau of Labor Statistics (BLS), using its Current Population Survey of non-farm jobs, announced this morning that in March 2011 "U.S. employers increased non-farm payrolls by 216,000 jobs, including 230,000 private sector jobs added in the month versus an adjusted upward 240,000 increase in February. The 'official' unemployment rate edged down to 8.8% from 8.9%."
The consensus expectation was for 195,000 new private sector jobs, versus the 230,000 that were announced. The BLS also identified 13.5 million unemployed workers.
The monthly BLS announcement regarding unemployment, however, as we note each month:
1. Uses only a "survey of households" rather than much more accurate payroll data;
2. Excludes changes in employment among the nation's 11.0 million farm and self-employed workers; and
3. Most important, does not take into account the 14.7 million workers who are:
i. "part-time-of-necessity" (i.e., underemployed) because their hours have been cut back or they are unable to find a full-time job (8.4 million);
ii. "marginally attached" to the labor force because while wanting a job, they have not searched for one in the past four weeks because of availability, skill or personal reasons (2.4 million); or
iii. "discouraged" and who have removed themselves from the labor force although they "currently want a job" (3.8 million).
Our Summary of U.S. Real Unemployment [attachment 1] makes these three adjustments. It also identifies average weeks unemployed, job openings, and the all-important "Jobs Gap" that needs to be filled in order to be at full employment in real terms. With the three adjustments made, in March:
· The number of real unemployed workers in all four categories - official BLS, part-time-of-necessity, marginally attached, and discouraged - decreased by 193,000 workers to 28.2 million, which remains more than twice BLS's official figure of 13.5 million. Significant changes in real employment included: private service-providing sector employment increasing by 199,000 jobs; manufacturing increasing by only 17,000 jobs; construction employment flat after increasing by 37,000 jobs in February; and government employment, mostly local, again declining, this month by 14,000 jobs.
· The real unemployment rate is 17.7%, compared to last month's real unemployment rate of 17.8% and to BLS's dramatically lower 'official' rate of 8.8%.
· The number of real unemployed workers has increased by 11.5 million since the start of the Recession, and just since December 2008 by 3.7 million. The latter figure and the Jobs Gap figure that follows are of significant political import, since the economy needs to add at least 150,000 new private sector jobs each month simply to keep up with population growth.
· The Jobs Gap, in real terms, is 20.2 million.
(Some in the national press, notably the New York Times, when commenting on real unemployment, still leave out those discouraged workers who while wanting a job have removed themselves from the labor force. Yet this remains a huge category (3.8 mm) and arguably the most 'unemployed' of the four categories. The all-in real unemployment rate of 17.7% drops to 15.7% when these workers are not included.)
The average number of weeks unemployed is at least 39.0 and the number of workers unemployed a half year or longer is at least 9.9 million (i.e., BLS's official figure of 6.1 mm plus the 3.8 mm discouraged workers). Each figure remains unprecedented in modern times, and when considered together, they are always a much better measure of the real employment condition than the commonly used weekly "initial jobless claims" number.
Compared to other nine recessions and recoveries since the Second World War, the Great Recession of 2007, which very much continues especially for the long-time real unemployed, remains hindered by our nation's large trade deficit in oil, the large and again growing manufacturing trade deficit with China, and federal tax policies that continue to dissuade job creation here at home.
