Approximately 211,000 net new jobs (seasonally adjusted) were created last month. That makes over 2 million in the last year. If you exclude the months of September and October where were distorted by the effect of the hurricanes, that gives an average of over 200,000 jobs per month for the last year. Even if you include those two months of slower than average growth, the average for the last 12 months is still almost 175,000 per month. That's not bad. It's even enough to bring some cheer to an Angry Bear (PGL). He's happy because the employment to population ratio hit 63%. That's up 0.6% since last March. The trend is definitely good--which is important since that ratio comes from the Household Survey, which has a small sample size (meaning month-to-month changes can be noisy).
I've been taken to task by some for being too optimistic and by others for being too pessimistic (though the count is probably in favor of those who call me too optimistic). For the past several months (since late spring/early summer of last year), I've been of the opinion that the labor market is better than a lot of people are giving it credit for, but not destined to break any records of the late '90s. In those months, we've seen some ups and downs, but all in all it seems very consistent with a "soft landing" scenario.
So is it too early to call a "soft landing"? Probably. We should at least get the 1st quarter GDP and another month of job growth before making the call. Some (the ones who call me too optimistic) would say that we should wait even longer. How long? What will be the characteristics of the data that signal a soft landing? A year of 200,000/month job growth? (Excluding the hurricanes, we got it.) A return to 3-4% real GDP growth after a quarter of below average growth? Declining inflation pressure and a pause in interest rate hikes by the Fed? I'd go with all of the above, and it does sound like it is possible in the next few months. (Though some think the Fed might put off that pause a little too long for their tastes.)
That said, let's look a little deeper into the labor report and see where the action is.
Labor force participation:
Men--up
Women--down
Teenagers (both men and women)--up
Black men and women 20 and over--up
Black teenagers--down (with an increase in their unemployment rate from 30.8% to 33.1%)
No high school degree--down
High School (no college)--up
Some college--up
Bachelor's degree-down
In most cases, the employment to population ratio behaves similarly. In short, the overall picture looks good, but different demographics will see things differently. If you've been following along, this is nothing new to you. Obviously Black teenage unemployment is a concern. I have mentioned in the past that labor force participation for women in general may have peaked, or nearly so, in the late '90s. Overall their rate for women continues to fall while for Black women (who participate in the labor force at a greater rate than white women) the rate continues to rise.
Finally, let's look at the change in the distribution of unemployment duration. Since March of 2005, how has the percentage of people unemployed for various lengths of time changed?
Less than 5 weeks--increased from 32.8% to 38.1%
5 to 14 weeks--decreased from 30.5% to 28.6%
15 to 26 weeks--decreased from 15.2% to 14.9%
27 or more weeks--decreased from 21.5% to 18.4%
That, my esteemed readers, is an improvement indeed!
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