David A. Rosenberg, the chief economist at Gluskin Sheff, a Canadian research firm, is not known for his rose-colored glasses. Indeed, when he was at Merrill Lynch in New York, there were complaints that he was too negative.
All of which makes the following discussion of the American employment situation interesting. Rather than look at the (disappointing) December report in isolation, he looked at the job market performance in 2013.
His comments are in italics. I will occasionally interject with parenthetical explanations where I think a reference may be obscure.
1. Employment rose 2% last year, representing a 2.26 million gain for all of 2013. I do hope nobody has too much trouble with a number like that in a year of near-record fiscal retrenchment. It was actually pretty good.
2. Part-time jobs actually fell 0.7% so even with Obamacare, this was a full-time employment story. The ratio of full-time to part-time rose to 4.285, the highest it has been in over five years.
(There was a lot of talk that companies would force workers into part-time jobs to avoid having to provide health insurance. It is not clear that actually has happened.)
3. Those working part-time for economic reasons fell 2% last year.
4. Those not in the labor force aged 25-54 that do not want a job rose 4.5% in 2013.
5. Those in that above-mentioned cohort who do want a job actually fell 3.3%.
6. The number of 25-54-year-olds who are not counted in the work force that claim they are “discouraged†sagged 18.5% last year.
7. The number of people who needed a second or third job fell 2.2% in 2013.
8. Both the U1 and U2 unemployment rates have fallen to cycle lows of around 3.5%. And according to a recent Morgan Stanley report, there is scholarly research proving that these shorter-term unemployment rate measures have a tighter relationship with wage growth than the longer-term jobless numbers do.
(The U1 rate is the percent of the work force that has been unemployed for at least 15 weeks. A year earlier it was at 4.3 percent. The U2 rate is the percentage of the work force that is unemployed because workers either completed temporary jobs or were laid off. It was 4.2 percent a year earlier.)
9. The unemployment rate in the financial sector is down to 4.2%, in manufacturing down to 5.5%, in information technology down to 4.8%, in education/health down to 4%, and all the way down to 3.6% in the resource sector. This is over 40 million workers and represents a 40% chunk of private payrolls.
10. If the unemployment rate in construction had not gone up from 8.6% to 11.4% due to the inclement weather in December, we would be sitting at a 6.2% national unemployment rate. The jobs market is tighter than you think.
11. After all, the pool of available labor contracted 13.4% in 2013 to a five-year low.
12. The unemployment rate for those with a college degree is only 3.3%.
13. The employment/population ratio in the key 25-34 year cohort finished 2013 at a seven-month high of 75.4%; 373k net new jobs have been created since Labor Day â€" all key for housing since this is the first-time homebuyer cohort.
14. The number of job openings as per the JOLTS data show a YoY increase of 5.6%. New hires managed to rise 1.7%. Layoffs plunged 14.3%. And the number of folks quitting their jobs for greener pastures jumped 13.5%.
(The JOLTS data comes from the Job Openings and Labor Turnover Survey, which gets much less publicity than the regular jobs report.)
15. As if to slap the nonfarm payroll headline in the face, the Rasmussen Employment index in December jumped to 89.8 from 85.7 in November â€" to stand at a six-month high.
(That index comes from polls of workers regarding worker confidence.)
So what is wrong with this jobs performance, exactly? And please â€" I’m not a cheerleader; simply a data wonk.
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