The U-6 Fix: Analysis of Today's Jobs Report
Groundhog Day: Flat Jobs Report
Today’s jobs report was appropriately like Groundhog Day (which is tomorrow). January showed 157, 000 jobs and an unemployment rate of 7.9 percent. Yawn. The economy is simply drifting with no particular momentum.
The good news is all backward looking – jobs in 2012 were revised up by a total of 422,000 jobs – 35,000 jobs a month – and November and December were both up significantly.
After that, start drinking coffee to make it through the report:
- Jobs were only 157,000 – not enough to make a significant difference in the labor market,
- Job increases were less broadly dispersed than in December,
- Aggregate hours and overtime hours were unchanged,
- Earnings were up only slightly,
- Labor force participation remains stalled at a low level of 63.6, and
- The unemployment rate ticked up to 7.9 percent.
The bad news was a rise in the Hispanic unemployment rate from 9.6 to 9.7 percent – more discouragement for these communities.
Overall the economy continues to be resilient despite headwinds that include declines in consumer confidence, the fiscal cliff, sequestration, the end of government funding, the potential debt-ceiling debate and a future festooned with red ink. The bad news is that Washington continues to test it resilience. The unknown is outlook from Punxsuawney Phil.
Data junkies here’s your fix: the January U-6 (the broadest measure of unemployment) was unchanged at 14.4 percent.
The bottom line: The January jobs report shows the economy moving sideways. Liberals are celebrating a revision of 35,000 jobs a month in 2012 – proof that they are charter members of the flat-earth society. When the economy is stalled, the new normal says “break out the champagne.”