More people have jobs in America this month than they did last month, so says the U.S. Bureau of Labor Statistics (BLS).
But the headline unemployment rate of 8.3% isn't the whole story.
It's not that there wasn't positive news. The addition of 243,000 new jobs far exceeded economists' expectations for an increase of 150,000. It was the seventh straight month of increases of 100,000 or more.
And yet buried in the BLS report are numbers that paint a different picture.
One of the main reasons the rate dropped, in fact, is because the BLS stopped counting nearly 1.2 million people as part of the labor force.
That's a record. It puts the labor force participation rate at a 30-year low of 63.7%, significantly below the long-term average of 65.8%.
While it's true the official number of unemployed fell from 13.1 million in December to 12.8 million, it helps when you simply don't include 1.2 million in the equation.
"This is not a fundamentally positive way to see the unemployment rate fall," Jason Schenker, president of Prestige Economics, said in an email to clients.
The labor force participation rate fudge isn't the only dim news lurking in the BLS numbers.
The number of long-term unemployed – those who have been without work for 27 weeks or more – remained stuck at about 5.5 million. That's 42.3% of all unemployed.
The "marginally attached" – people who want have searched for work in the past year but not the past month – category also remained steady at about 2.8 million.
But the number of underemployed workers – "part-time for economic reasons," in BLS-speak – increased from 8.1 million to 8.2 million.
A few more sobering statistics: America has 5.6 million fewer jobs than it did in 2008. And there are 462,000 fewer people working now than three years ago, despite a steadily increasing population.
When you add it all up, the prospects for jobs in America don't look quite so rosy.
"We still have a long way to go before the labor market can be said to be operating normally," noted U.S. Federal Reserve Chairman Ben Bernanke at a House panel hearing Thursday. "Particularly troubling is the unusually high level of long-term unemployment."
We've seen plenty of disturbing American jobs data just in the past week.
For example, a report from consulting firm Challenger, Gray & Christmas said that planned job cuts rose 28% from December to 53,486.
And a report from payroll processor ADP showed that the private sector added just 170,000 jobs in January. That's well short of the 257,000 that the BLS attributed to private sector hiring.
Even reports from other parts of the government contradicting what the BLS is telling us.
The Congressional Budget Office this week said that based on current law and policies, unemployment will actually increase to 8.9% by the end of the year, and 9.2% in 2013.
And pollster Gallup Inc., which does its own tracking of the unemployment rate, reported that the general unemployment rate rose from 8.5% to 8.6%. And Gallup said the rate for the underemployed jumped to 18.7% from 18.3%.
"Regardless of what the government reports, Gallup's unemployment and underemployment measures show deterioration since mid-January," a report on Gallup's Web site says.
So while Democrats running for re-election – including President Barack Obama – now have some pretty statistics supporting their claim for more jobs in America, the crisis is not over.
"I wouldn't get anywhere near the champagne," Jared Bernstein, a former top White House economist now at the Center for Budget and Policy Priorities, told Politico. "That would be both a political and economic mistake."
News and Related Story Links:
- Money Morning:
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- Money Morning:
High Unemployment Means More Job-Killing Taxes
- Money Morning:
Obama May Soon Join America's Unemployed
- Money Morning:
Obama's Jobs Plan Will Barely Dent Unemployment
- The Hill:
CBO projects $1.08 trillion deficit, 8.9 percent jobless rate in 2012
Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low
- Bureau of Labor Statistics:
Employment Situation Summary
Unemployment rate drops to 8.3%, 243K jobs added
- Washington Post:
U.S. adds 243K jobs in January; unemployment rate drops to 8.3%
U.S. adds 243,000 jobs in January
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.