Marathon runners.
For the 26th consecutive month – from January 2021 onward – the American job market has continued its incessant, forceful march forward and upward, posting job gains of 311,000 in February.
To put this in perspective, the Bureau of Labor Statistics has been measuring and reporting on the job market since 1939, 84 years running. With the exception of five years, there has never been a year in which 311,000 wasn’t an eye opener and the focus of glowing reports. Now? It’s the fifth lowest total in the past 26 months, during which the job creation numbers have broken all records.
What’s more, the last two years are the top two in history, adding 6.743 million jobs in 2021 and 4.818 million in 2022. No 4-year administration in history has presided over a performance like we’ve been witnessing in just the last two, not even the roaring nineties, which created 23 million jobs in Bill Clinton’s two terms.
So, you’d figure, this engine’s got to run out of gas sooner or later – which is what too many prognosticators have been saying, month after repetitive month. And then comes the next month’s report, beating expectations once again. Well, no wonder the market is beating expectations; the expectations are too low. When you’re looking through the wrong end of the telescope, everything looks small. And when you’re basically a pessimist, you’re always waiting for the other shoe to drop.
Neither scenario, obviously, is the case.
And more good stuff beneath the surface
The headline, marquis number – 311,000 jobs created – is only the surface. A deep dive reveals even more positive results, ones that never make the talk shows – but should.
For instance…
While the civilian noninstitutional population (all people 26 years old or older) grew in February by 150,000, the civilian labor grew by 419,000. In other words, eligible workers continued to rush back into the workforce, a sign of strength and optimism.
Although the unemployment rate ticked up by 0.2% to 3.6% – which will happen with an influx of new candidates – that unemployment rate is still historically low, a more remarkable phenomenon when you factor in the Fed’s efforts to bring down inflation, which by nature led to higher unemployment.
An indication of an attractive job market that is, at the same time, structurally sound, is that 177,000 more people were employed than in the month before, while 242,000 more people were unemployed. That might look like a negative number, but it is exactly the proof that formerly discouraged workers are gaining confidence.
Open jobs – those that employers would fill immediately if the right candidate showed up – still number near 11 million for the 20th consecutive month, coming in at 10,824. (This is January’s number, as this stat is reported a month behind.) Nevertheless, taken in context with the other trends, as reported here, the drop of 410,000 open jobs tells us these jobs are being filled. Now, one month does not make a trend, but as part of the overall picture, this is meaningful. The bottom line is that there are still 1.8 open jobs for every unemployed job seeker.
While all this was going on, although average hourly earnings for all employees on private nonfarm payrolls rose by 0.2 percent in February, and over the past 12 months, average hourly earnings have increased by 4.6 percent, continuing a long trend and making inflation more bearable for more people.
Where were the jobs?
Job creation was exceptionally widespread again: 105K in leisure and hospitality, 50K in retail, 46K in government (mostly local), 45K in professional and business services, 44K in healthcare, 24K in construction, and 19K in social assistance. Small (and likely temporary) losses were taken in other sectors.
What’s still unclear…
In light of the ongoing success of the strongest job market in history, what remains a mystery is how a remaining few pundits keep insisting it’s not.
But then again, political season is once again upon us.
