Selden, N.Y.: Photo of a help wanted sign along Middle Country Road in Selden on July 20, 2021. ... [+]
April’s Jobs Report from the Bureau of Labor Statistics came out today. The U.S. economy created 175,000 jobs last month, much to the disappointment of the multitude of economists, business analysts, and other self-styled “experts” who seem to be wrong month after month, either up or down.
This month, the news reports, print and broadcast, had this tone: “…far short of expectations” or “…sign of weakness ahead” or things like that. For the previous 39 months, it was the opposite: “far exceeding expectations” and so forth. One way or the other, a lot of “experts” are making good livings being wrong over and over again.
That’s because they apparently see the trees, not the forest, and the short term, not the long view. If they’d have looked at the big picture, they’d have seen long ago that there’s reason to continue to feel good about what’s going on.
April wasn’t a bad month, not by a long shot.
It certainly wasn’t “horrible:” – as our previous president posted in capital letters on his social media platform almost as soon as BLS issued their report. In fact, after 39 months of dizzyingly spectacular numbers, a month like this had to happen. But make no mistake: 175,000 jobs is quite OK.
Consider this data. The U.S. population is 330 million, while the civilian noninstitutional population – adults of working age – is 268 million, and the civilian labor force – adults working or looking – is 168 million. The civilian labor force, then, is approximately half that of the country. Now, with the population growth rate having plummeted to 0.4%, that means that we are growing by 1.32 million people per year. And if half of them will enter the workforce, we will need to create 660,000 jobs annually in order to keep up with population growth. Divided by 12 months, that 660,000 comes down to creating 55,000 per month.
April produced three times the number of jobs needed
And what, again, was April’s number? 175,000: more than three times what was needed. 175,000: what one prognosticator called “far below expectations.” 175,000: what our former president called “horrible.”
Further, every job sector – from healthcare to manufacturing – either created jobs or held steady, while wages, which rose at a slower rate than in Q1, are still outpacing inflation.
I the only one who likes today’s report? Apparently not. Wall Street was giddy this morning, surging from the opening bell and spending the day up between 400 and 500 points (I am filing this report about an hour before closing).
So there you have it: another example of what’s wrong with projections. There’s more to them than meets the eye. And the American job market is not a one-celled organism. It’s complex.
