It’s no secret that we’re experiencing the third period of job stagnation within the so-called recovery. As such, the news that 163,000 jobs were created in July might sound like a moderately positive report. Don’t be fooled. There is no good news in last week’s jobs numbers from the BLS.
As we’ve noted throughout the year, the real indication that our economy is still sick is the fact that the labor force is shrinking. Worse, our population is simultaneously growing, engendering a nightmare scenario in which the job creation will never catch up to the population growth, leaving millions shut out of the labor force.
Despite the fact that 163,000 new jobs were created, the labor force shrunk by 150,000, all but wiping out the gain. And what about the population? According to the BLS Household Survey, the civilian employment-age population grew by 200,000! So we actually lost jobs relative to the population growth. As a result, there are 195,000 more people not employed, and a whopping 348,000 more people who are not in the labor force. The labor force participation rate is down to 63.7% and the employment-population ratio is down to 58.4%, both near record lows.
But the most important factoid of the BLS release is the broad U-6 rate, which inched up to 15%. That is the number that accurately reflects the jobs situation. We ostensibly have 15% unemployment in this country.
We must all remind our friends who are less savvy about politics that we will never fully recover until we enact pure free-market policies where success is not punished and failure is not subsidized.
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