Economy improving, but not enough

Bill Knight column for Thursday, Friday or Saturday, May 26, 27 or 28

Amid cheery interpretations of recent economic reports by government and Wall Street, there was disappointment on Main Street. Data show employment is “stable” (stagnant?) and wages in the year’s first quarter barely budged from a year ago.

“Enough is enough” with self-serving spin. On the other hand: “This ‘recovery’ isn’t enough!”

The official jobless rate stayed at 5 percent in April, according to the Bureau of Labor Statistics. There was an increase in jobs of 160,000 after businesses claimed they added 171,000 jobs but government at all levels lost 11,000 positions.

For 62 consecutive weeks, the longest run since 1973, jobless claims have remained below 300,000 – a figure tied to some knothead’s idea of a “healthy” labor market.

Enough! Tell that “good news” to the additional 7.9 million unemployed Americans BLS reported.

In Illinois, it’s worse, as April’s jobless rate went up to 6.6 percent.

Nationally, April’s joblessness is 46,000 fewer than March, true. The unemployment rate counts people who are jobless and looking for work (regardless of whether they receive unemployment benefits). But that doesn’t count those who have given up looking for work. So counting people working part-time but preferring full-time jobs and people so discouraged they stopped looking for work, BLS concedes that 15.4 million workers – nearly 1 in 10 – were unemployed or underemployed last month.

Enough!

“The falloff in job growth was largely attributable to weak job growth in construction and retail, with the former adding just 1,000 jobs in April and the latter shedding 3,000,” said progressive economist Dean Baker of the Center for Economic and Policy Research. “Both sectors added close to 40,000 jobs in March.”

Illinois added 5,400 jobs last month, but more than half of that growth was in temporary jobs, the Illinois Department of Employment Security said. The state's 6.6-percent jobless rate isn’t just higher than the national rate; its’s been rising for six months.

More than 439,000 Illinoisans were unemployed last month, about 56,000 more than a year ago.

“Job growth may be coming in line with the slow pace of economic growth,” Baker added.

Initial claims for states’ unemployment benefits increased 20,000 to a seasonally adjusted 294,000 for the week ended May 7, the highest since February 2015, the Labor Department said. In a Reuters poll, economists had predicted initial claims of 270,000 that week. It was the third consecutive week of increases in first-time applications for jobless benefits.

Despite the bump in jobless claims reaching a one-year high, government- or corporate-cozy economists blamed striking phone-company workers. Jacob Oubina of RBC Capital Markets in New York told Reuters that applications for jobless benefits would have fallen excluding Communications Workers and Electrical Workers striking Verizon. About 40,000 Verizon workers went on strike a month ago, but most are located in the Northeast, so the work stoppage is a regional factor at most.

But more than 500,000 construction workers (6 percent) were unemployed in April, a figure union leaders say understates construction joblessness. (They note that even if people work one day during BLS’ survey week, they’re counted as employed for the whole month.)

The biggest increase in jobs was in the low-paying service sector, which added 174,000 jobs, while higher-paying factories gained just 4,000 jobs last month. April had 702,000 jobless factory workers (4.5 percent).

"The claims data ... have increased significantly over the most recent three weeks and this does suggest that the labor market has deteriorated," said Daniel Silver, an economist at JPMorgan in New York. "But we do not want to read too much into the individual weekly figures, especially around this time of year."

“Read too much,” he says? Enough rationalizing people’s plight!

Meanwhile, the BLS’ “Usual Weekly Earnings” report for the first quarter of 2016 showed an overall 2.7 percent increase in pay, with construction wages rising $8 from a year earlier, to $789. Transportation workers gained $13 an hour, to $644; service occupations went up $19 to $526; and managerial or professional positions rose $25, to $1,174.

However, in “constant dollars” taking into account inflation – the dollars it would take to purchase the same goods and services as the base year of 1984 – the median (mid-point) of weekly earnings was $346 – $1 more than the first quarter of 2009.

That’s not enough improvement for everyday workers.
Enough misleading optimism.

The jobs aren’t enough; the pay’s not enough.

[PICTURED: Dan Wasserman cartoon, from joblessyouth.com.]