About that jobs report.
Upon closer inspection, the report was a total
disaster. You wouldn’t know this from the financial media’s
coverage, but it was.
The establishment survey shows a gain of
288,000 jobs last month. However, the household survey shows that
that the economy lost 73,000 jobs in April.
This is critical. The household survey does not
allow for “duplication of individuals,” meaning that if someone
holds more than one job, they’re only counted once. In contrast, if
someone is working multiple low paying jobs, every single job will be
counted in the establishment survey.
Put it this way. If you go from one solid full
time job to working as a waiter, cab driver, and tossing pizzas, the
establishment survey will show that the economy created TWO jobs (one
job lost plus three started= two jobs net) whereas the household
survey will show NO growth (one person lost a job and started working
elsewhere).
With this in mind, you should be paying
attention to the household survey. The household survey shows 73,000
jobs were LOST. This negates the claim that 288,000 were created.
Aside from this oddity, we find that 806,000
people left the labor force. Moreover, reentrants (folks returning to
the labor force after being unemployed) fell 417,000. And new
entrants (folks entering the labor force for the first time) fell
126,000.
So the number of people in the labor force fell
as did the number of people returning to the labor force and the
number of folks entering the labor force for the first time.
To continue reading today’s article…
Phoenix Capital Research
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