39.3 Million Missing Jobs

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At first glance, this is an improvement from the 39.5 million missing jobs last month. However, this improvement actually came from revisions in the data. Last month was not as bad as originally reported.

As strong as this month's employment report was, we continue to drift away from the trend established between 1939 and 2000. In order to simply maintain our distance from the trend line, an additional 73,000 jobs would have been needed (on top of the 243,000 jobs that were actually added).

Simply put, this exponential trend has failed and continues to fail.


Click to enlarge.


Click to enlarge.

First the good news. Year over year employment growth was 1.5%. That's not a bad number at all in absolute terms. It is above the rate of population growth. What more could we ask?

Now the bad news. In relative terms, it is still well shy of the 2.2% median historical growth. Consider too that the median value also includes periods of recessions. If recessionary periods were therefore removed for a direct apples to apples comparison (since we are not currently in a recession), then we'd be doing even worse on a relative basis right now. Further, I am not even going to mention just how much added government debt it is taking to attain this 1.5% employment growth. Oops. I said I wouldn't do that. Sorry!

So here are a few rhetorical questions on my mind. What will happen to the 1.5% growth that we are currently experiencing when the next recession hits? Or has the government miraculously guaranteed that recessions will never occur again? If a miracle has in fact occurred, then what exactly makes our weakened economy permanently resilient? And whatever it is, why weren't we doing it all along?

In all seriousness, I strongly believe that a sustainable 2.2% employment growth rate will never occur again (counting future recessions). At best, I would argue that employment growth cannot exceed the rate of population growth long-term (unlike the period from 1939 to 2000 due to women entering the workforce). At worst, hello robots (and demographics).

In any event, this long-term exponential trend in employment has failed and there is absolutely nothing that can be done to "unfail" it. As I have said before, this draws into question every other long-term exponential trend that this country has experienced (many of which are also failing).

Source Data:
St. Louis Fed: Total Nonfarm Payrolls