On Friday, the Bureau of Labor Statistics (BLS) released the latest jobs report for the U.S. economy. In March, non-farm payroll employment rose by 216,000 jobs. According to the report, employment gains were seen in both the goods-producing and service-providing sectors. This job creation lowered the overall government unemployment number by 1/10 of 1 percent to 8.8 percent. Naturally, the data was applauded by the White House. Although acknowledging that more work needs to be done to produce more jobs for American workers, Austan Goolsbee, President Obama’s leading economic advisor, indicated he felt the jobs report for March was “quite solid”.
Upon closer inspection of the numbers, it is clear they are anything but solid. To put things into perspective it would take eight years of similar monthly gains to bring the economy back to full employment. That means that many who have lost their jobs in the last 3 years would not find new ones until 2019. In other words, the job gains of March are too small to call them “solid”.
If March’s job gains are any indication of what we can expect in the future, American workers better get use to a much lower standard of living. The March number included gains in temporary help (28,800), leisure and hospitality (37,000), and retail (17,700) – jobs that pay generally lower wages and provide few or no benefits like health care. Indicative of these low paying job gains was the average hourly earnings number published in the same BLS report. It showed no increase from its previous level in February. Thus, while the economy added jobs they are not the kind a recovery is based on. Anything but good jobs cannot be considered “solid”.
Of course, Goolsbee’s opinion is flawed from the get-go as the number the BLS uses to report unemployment is highly defective. It doesn’t count the underemployed (those unemployed or working part-time but desiring full-time work). Gallup polling found their current underemployment number for March up slightly to 20.3 percent of the U.S. workforce. This number is 2.3 times greater than the BLS number and is moving in the opposite direction. So while Goolsbee applauds the BLS report, according to Gallup the unemployment situation is much worse and continues to deteriorate.
Lastly, Goolsbee’s comment that the March jobs report is “quite solid” can easily be debunked when you consider that government will be paying for much of the job gains. In March, the health care sector continued to add jobs as it has throughout the financial crisis. But, who ultimately pays the salaries for these jobs? The government does through entitlement programs like Medicaid and Medicare. What about the health benefits of the new temporary, food services, and retail jobs? You guessed it – the government. At a time when more Americans are on food stamps than ever before and many U.S. workers have been collecting unemployment for more than 2 years, real job growth would be more self-sufficient. Since most of the gains in jobs for March are not, you could argue that the meager gain in employment is negated by the need for government to foot the bill.
At the end of the day, there is little to celebrate in March’s jobs report. The unemployment rate is much higher than the phony number the BLS has published and the jobs produced were woefully inadequate in terms of number and pay. That is why Austan Goolsbee’s comment that the jobs report for March was “quite solid” is nothing more than a Cruel April Fools’ Joke.