Friday’s issues of the New York Times and the Financial Times painted glowing pictures for the US jobs market, based on October’s 161,000 jobs added. A quick investigation calls their conclusions into question.
The NYT’s headlines heralded the unemployment rate hitting 2008 lows, which was at the start of the World Financial Crisis. True, but what the lengthy article did not dwell on is that the overall participation rate in the labor force is below 63%, versus over 66% before the WFC.
The Times chose to highlight that the “jobless rate” fell to 4.9% in October, the lowest since February 2008. The jobless rate ignores the fact that someone seeking employment who gets discouraged and quits looking is no longer counted as unemployed. So, the overall participation rate is more relevant, but the media report a lower unemployment rate, which makes the economy appear better that it is.
Further, the NYT did not mention that of the 161,000 jobs added, 116,000 were part-time, and they were primarily in the low-paying services industries. And, buried deep in the article was that last year 53,000 jobs in manufacturing and 11,000 in mining–higher paying jobs–were lost.
And, here’s something on which I saw no reporting: October in the six preceding years averaged 212,500 jobs added. So, why are 161,000 jobs added supposed to be such good news?
The Financial Times headlined the news with “Wage data underline solid jobs market,” but did not mention that 161,000 jobs fell far short of the 212,500 average job growth for the prior six Octobers.
Both papers emphasized the 2.8% average hourly earnings increase in October, but failed to note the negative aspect: inflationary pressures in the jobs market. Employers are having to pay more to recruit and to retain employees.
Any honest assessment reveals that the economy is weak, not robust, not growing rapidly, not “solid.”
Among Keynesian economists, there are serious discussions for the need for “fiscal policies” to get the economy going, which means there is a good chance we will have massive deficit spending in the near future. This will result in higher gold and silver prices. The metals should be bought on all prices dips.