Churning Labor Force, Obtuse Federal Reserve: Jobs and Joblessness in February

In February the number of employed Americans increased by 177,000 in the household survey, and the number of jobs in the survey of employers increased by 311,000. But unemployment also increased by .2 to 3.6%. It is true that 3.6% is still, by conventional standards, a pretty low rate. But the National Jobs for All Network’s number for hidden unemployment adds part-time workers who cannot find full-time work and people who want jobs but have not searched in a while. NJFAN’s total unemployment rate is 8.8%, more than twice the official rate. Clearly, we need many more new jobs right now.

Bad news for specific groups: the unemployment rate for Black Americans rose .3 to 5.7%; the Hispanic rate jumped .9 to 5.3%; the Black teen rate increased by .6 to 20.4%; the Asian rate jumped .6 to 3.4%. These upticks are troubling. Let’s see what the final March figures show.

 

Did the Pandemic Help Disabled Workers?

The unemployment rate for disabled Americans rose from 7.1% to 7.3%, and is twice the overall unemployment rate. Working at home, which many employers resisted before the pandemic, obviously became more common. And disabled people have told reporters that this made a positive difference in their work-lives. But not for enough people. The disabled unemployment rate was twice the rate for non-disabled people for most of 2022. Also, the share of the adult disabled population that is working or looking for work–the labor force participation rate–was only 23.9% last month. (The rate for non-disabled people stood at 65.3%.) It is true that fewer disabled people can work, but I think more of those who can work don’t bother searching. It is just too difficult to find flexible employers.

 

Layoffs Surging?

In recent weeks META/Facebook and Amazon have announced more firings. But how about layoffs for the whole workforce? The latest Job Openings and Labor Turnover (JOLT) report is for January, and it shows that layoffs increased in January by 241,000. But total layoffs are still rather low at about 1% of the labor force.

Are we creeping toward recession or not? Not yet. Yes, job openings have fallen from their December number, but employers report that there are still over 10 million vacancies, and that is a very high number. Whether all those vacancies are actual openings ready to be filled right away is uncertain to me. But perhaps I am being unfair to employers. After all, hiring rates have held up. More than six million new hires every month. That’s over 70 million hires a year. Talk about churning in the labor force! 

Such numbers do not look like the start of a recession. And here’s another relevant fact. Initial claims for unemployment benefits for the week ending March 11 were 192,000. That is low, and every other week in 2023 has been low. Unemployment claims have stayed down despite splashy publicity about layoffs. Have some unemployed people lost eligibility? Are severance payments in some sectors delaying applications for unemployment benefits, as Daniel Silver, a JP Morgan economist, suggests. Perhaps, but it seems doubtful that these could explain the persistent pattern of low initial unemployment claims. 

 

Quitters

Remember the Great Resignation of 2021-2022? We don’t talk about it much anymore. As we hear every day or two about a new batch of layoffs, are people less confident about quitting their jobs to find better ones? Are they learning that the quitters’ world isn’t as rosy as it’s supposed to be? A recent study revealed unbelievable levels of regret and disappointment among Great Resigners. A survey of 825 employees by Paychex in October found that 80% of those who quit their jobs regretted their decision. They missed old colleagues and they weren’t getting the level of compensation they expected. The survey found that 68% said they were trying to get their old jobs back.

Have more workers decided to hang on to their jobs? Apparently not. (And people have a dozen other reasons for quitting their jobs that don’t concern finding better jobs.) The number of people quitting their jobs fell a little to 3.9 million, but 3.9 million quitters a month is still high and more than the number for any month from December of 2000 through 2020. Over one year, that’s 47,000,000 quitters. More churning in a very large labor force.

 

Will Bankers and Money-Managers Drive the Economy off the Cliff?  

Can the banking system be saved before more banks fail? Maybe. Government officials and other banks have acted to stop the panic. Will the Federal Reserve pause the credit crunch that is key to its anti-inflation program?  It should, but the Fed just raised rates a quarter of a percent. 

In fact, inflation rates are down. The consumer price index rose much less in the eight months of July 2022-February 2023 (2.3 points), than in the previous five months of February 2020-June 2020 (4.2 points). Yes, high prices are still all around us. And earnings for average workers are barely keeping up with inflation. Yes, low-income households face daunting challenges at the grocery store. I am not poor, but I am still taken aback when I check out and look at the receipt. I only bought 12 items. How did I spend $85? 

There are things that can be done to cushion poor people from the negative impact of high food prices. Food Stamp benefits and eligibility should be broadened again, and semi-monopolies with the power to push up prices should be reined in.