Well, its U.S. jobs report week once again and it’s Janet Yellen’s first day on the job as Head of the U.S. Federal Reserve (Welcome, Janet and do not let the markets push you around. Kill any talk about a ‘Yellen Put’ once and for all). So it seems like a good time to take a closer look at some of the U.S. jobs numbers. After all, that’s what Ms. Yellen and her colleagues are doing, today and everyday I’d guess.
We spend a lot of time talking about the bigger picture numbers – job growth and unemployment and the like – but sometimes it is the more obscure statistics that tell the story. So to find some of those, I checked out the Federal Reserve Bank of St. Louis’s neat ‘FRED’ database (if you haven’t ever used it, it is worth checking out. There are zillions of data series available for free, and you can see them graphically with a just a click of your mouse button). I decided to look under the U.S. household survey, which is one of the two job series we get data on every month (the other is the non-farm payrolls survey) and the one which, in my opinion, has been the most accurate at tracking the trends in employment.
Did you know that FRED has a category called ‘losers and leavers’? Of course, they are referring to people who are job losers, not calling any group of people losers, but still. Kind of harsh. At any rate, the series that attracted me was one called ‘job losers not on layoff as a percent of the unemployed’. What is that exactly? Well, pretty much what it sounds like. This is a category that does not include newly-graduated students who are now seeking jobs. It does not include stay-at-home parents who want to go back to work. It does not include retirees who want to maybe pick up some part time work. And it does not include those who are on lay-off, but may well be back to work once things pick up with their last employer. It is a category that, in my opinion, takes out some of the noise and isolates people who have lost jobs that were paying them money, and who are looking for new ones. There are differing opinions on this, I’m sure, but I see it as a good indicator of the core of the jobless population. The higher is the percentage of ‘losers’, in my opinion, the worse is the U.S. jobs situation.
So what do the figures tell us? Well, you can put your own spin on it, but I’d say the situation is dreadful but getting better. As of December of 2013, just under 42% of the unemployed were job losers not on layoff. That’s high, but not nearly as high as the close-to-54% the figure hit several times in 2009 and 2010. Having said that, pre-recession the figure was well under 30%, and at 42% was as high as it ever got during the recession before this (post-911). So you can see that things are different this time.
If anything, it is heartening to see that in recent months this category has slipped something. It is hard to discern if that is because some have simply dropped out of the job market (choosing to call themselves retired or students or stay at home parents rather than job-seekers) or because these days fewer people are actually losing their jobs and more people are finding new ones.
Either way, at 42% the percentage of the U.S.unemployed who have actually lost jobs and have not immediate prospect of new ones looks to high to me. I’m guessing that’s how they are going to view it at the Fed as well.