Friday, March 6, 2015

Employment Update: February 2015

The first Friday of the month brings us the Employment Situation courtesy of the Bureau of Labor Statistics (link). In summary, the economy added 295,000 new jobs. The BLS, however, revised January results downward (-18,000 jobs); hence the net increase since the last report here has been 277,000 jobs. In the 2010-2015 period, this has been the second best result for February yet; the best came in 2013 when we had a gain of 314,000 jobs.

The graphic above shows the monthly progress from the “grand canyon” of the Great Recession to the present. We’ve yet to match the huge monthly gain in May of 2010, but the overall pattern shows steady growth in economic health.

Taking results for January and February and projecting the entire year 2015 based on these preliminary results, it appears that 2015 will outperform the earlier years of the recovery—as shown in the second graphic.

We had recovered all jobs lost in the Great Recession in December of 2013*. Since then I have been tracking how we are doing recovering what I’ve been calling the “Labor Force Growth Deficit”—thus jobs required just to keep up with the growth of the labor force. As of the end of 2013, we needed to recover 4.19 million jobs. Of these we have now recovered 87 percent, leaving just 13 percent still to recover. Growth in the labor force alone requires us to gain 87,300 jobs every month minimally. Any gains above that number are net gains for the economy as a whole. The graphic above shows us how we are progressing.

Now for a brief look at where the growth has been most prominent. February job gains divide as follows: The Goods Producing Sectors’ share has been 9.8 percent, Private Service Producing Sectors accounted for 87.8 percent, and Government for 2.4 percent. Retail Trade alone, part of Services, accounted for more jobs than Mining, Logging, Construction, and Manufacturing put together. That does not please me much. And biggest gainer within Services was Leisure and Hospitality. Doesn’t please me much because, for me, a really robust economy is based on Goods Production; but seeing that sector come to dominance again is a bit of an idle dream.
*This date, thanks to later data revisions, is wrong. It should be April 2014. 

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