Friday’s jobs report was widely panned as a poor report as the number of jobs added was the lowest since the post-lockdown recoveries began. But as often is the case, the reality when you dig beneath the headlines, was a bit better than the news reporting otherwise seemed to suggest.
First, the headline numbers from the jobs report. The unemployment rate came in at 6.7%, that's a 0.2% improvement. We added +245,000 jobs and positive revisions from previous months total 11,000 jobs.
As was evidenced in the ADP private-sector jobs report, there were gains made nearly across the board growth including in manufacturing and construction which are economically sensitive and good leading indicators. The reason the gains weren’t stronger was predominately due to about 100,000 temporary Census workers being laid off with the completion of the Census. That was to be expected and has nothing to do with the economy. The one real fly in the report’s ointment was retail. With the purging of many physical retail stores still occurring and seasonal hiring having in retail run its course, we did shed around 35,000 retail jobs. That is a sign of hard economic times for those businesses.
Now for the real unemployment rate once underemployed, long-term unemployed, and marginally attached people are accounted for. The actual number is 12%, there are currently 13.4 million people who are long-term unemployed, underemployed, or marginally attached to the workforce which makes up the difference between the base rate of 6.7% and the real rate of 12%. As for Demographics, the unemployment rate declined for women but was essentially flat for men and all other demographic breakouts. Let's move to money, the average hourly wage rose 9 cents per hour during the month and the average full-time income is currently $53,528, a gain of $2,923 over a year ago.
The news generally continues to be great for those who are full-time employed with wages and hours worked continuing to rise well above year-ago levels. This continues to be a jobs economy of the haves and have nots. Those who are full-time employed are generally earning more than they ever have, including a near 6% increase in earnings year over year. For those without employment, the competition for employment is the most challenging it’s been in around eight years. On balance, the job’s report was far better than the headlines suggest. The economy is getting its next true test right now with various states and local governments imposing lockdowns.
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