Vantage Point - American job market: When not so good is pretty good

Vantage Point – American job market: When not so good is pretty good

Posted by Admin May 10, 2024 Jobs

Eli Amdur
| NorthJersey.com

April’s Jobs Report from the Bureau of Labor Statistics came out recently. The U.S. economy created 175,000 jobs last month, much to the disappointment of the multitude of economists, business analysts, and other self-styled “experts” who seem to be wrong month after month, either up or down.

This month, the news reports, print and broadcast, had this tone: “…far short of expectations” or “…sign of weakness ahead” or things like that. For the previous 39 months, it was the opposite: “far exceeding expectations” and so forth. One way or the other, a lot of “experts” are making good livings being wrong over and over again.

That’s because they apparently see the trees, not the forest, and the short term, not the long view. If they’d have looked at the big picture, they’d have seen long ago that there’s reason to continue to feel good about what’s going on.

April wasn’t bad month, not by long shot

It certainly wasn’t “horrible” – as our previous president posted in capital letters on his social media platform almost as soon as BLS issued their report at 8:30 a.m. on May 3. In fact, after 39 months of dizzyingly spectacular numbers, a month like this had to happen. But make no mistake: a job creation number of 175,000 is quite OK.

Consider this data. The U.S. population is 330 million, while the civilian non-institutional population – adults of working age – is 268 million, and the civilian labor force – adults working or actively looking – is 168 million. The civilian labor force, then, is approximately half that of the country’s total population – and traditionally has been.

Now, with the population growth rate having plummeted to 0.4%, that means that we are growing by 1.32 million people per year. And if half of them will enter the workforce, we will need to create 660,000 jobs annually in order to keep up with population growth. Divided by 12 months, that 660,000 comes down to creating 55,000 per month.

April produced three times number of jobs needed

And what, again, was April’s number? 175,000: more than three times what was needed to keep up with population growth. 175,000: what one prognosticator called “far below expectations.” 175,000: what our former president called “horrible.”

To the former president’s point. Of the 36 months of his administration not including 2020, for which we have to give him a pass, as that grotesque scene was beyond the reach of both mortals and gods, 15 of those months came in at under 175,000 jobs created. He’s living in a glass house yet still throwing stones.

Back to my point. Not only are we keeping up with population growth; we’re keeping up with a forcefully growing job market. That one-tenth of a point uptick in the unemployment rate is meaningless, as it’s been flitting back and forth for a year. Most notably, it continues to remain under 4.0% as it has for 27 consecutive months. Depending on the Fed’s next move or two, this is worth watching. The other side of this coin is that, although the ranks of the employed rose only slightly, they rose, nonetheless.

Further, every job sector – from health care to manufacturing – either created jobs or held steady, while wages, which rose at a slower rate than in Q1, are still outpacing inflation.

Am I the only one who likes April’s report? Apparently not. Wall Street was giddy about it, surging from the opening bell, spending the day up between 400 and 500 points, and finishing up 450. According to many experts, that was directly attributable to the tacit approval of and confidence in the job market’s continued strength. This job market has reached cruising altitude and speed after smashing and setting every record in memory – but don’t be surprised if there are more spurts ahead.

One other caution: it’s an election year and both sides exaggerate. Keep that in mind.

So there you have it: what some see as not so good turns out to be pretty good, after all. There’s more to the market than meets the eye. And the American job market is not a one-celled organism. It’s complex.

In the meantime, it’s actually pretty good.

Career Coach Eli Amdur provides one-on-one coaching in job search, résumés, and interviewing. Reach him at eli.amdur@amdurcoaching.com or 201-357-5844.