Surely this is one of the great punditry miracles of our age! After years of resolutely ignoring workforce decline – claiming every downward tick in the nominal unemployment rate was pure, undiluted joyous news, even though most of those ticks occurred because hundreds of thousands of people were giving up and dropping out of the workforce entirely – liberals are falling all over themselves to bang out Tweets and blog posts explaining how it’s a good thing that same nominal unemployment rate just ticked up.
Nearly 400K back into labor force moved UE up to 5.5%. That’s GOOD NEWS not bad news.
— Ben White (@morningmoneyben) June 5, 2015
They pretended these people didn’t exist when they left the workforce, but now they’re rolling out the red carpet and welcoming them back. The departure didn’t happen, but the return is cause for celebration. Hallelujah! Like the man who opens his refrigerator in a pitch-dark kitchen for a midnight snack, they have seen the light!
Actually, the return of these 400,000 people to the workforce is only the first half of potential good news. Now they have to find jobs. It’s good that they’re trying, but not enough of them have succeeded yet. We won’t know the rest of the story for a few months, at which point the inevitable revisions to the April and May numbers will also be in. It was always amusing to watch the Obama Administration and its apologists respond to each new entry in a long string of dismaying reports by frantically stammering, “you shouldn’t read too much into any single month of data!” but they were right – it’s quarterly and yearly trends that matter.
Speaking of the big picture, job creation 2015 remains slightly worse than 2014, not better…
US job growth has averaged 217,000 a month this year vs. 229,000 through the first five months of 2014
— James Pethokoukis (@JimPethokoukis) June 5, 2015
… and since a lot of the new jobs are temporary and part-time work, average earnings aren’t improving much…
Hourly earnings ticked up in May, but still hovering just above 2%/year. No clear upward trend. pic.twitter.com/9GmCRJclEf
— Ben Casselman (@bencasselman) June 5, 2015
… and workforce participation is still hovering around three-decade lows. Another interesting point about wage growth: most of May’s appears to have occurred among high-end supervisors and managers, the very same people liberals spend most of their time savaging for their “income inequality.” It will be nice to have a few weeks where Democrats embrace income inequality like a long-lost child, because otherwise they’d have to discuss the less appealing elements of the May unemployment report.
Maybe this is the true beginning of the long-promised but never-delivered recovery – we can all unite in hoping so – but it’s still weak and much too late. The lost Obama years are going to hurt us for a long time to come. We’ve made far too many hard-to-reverse adjustments to a “new normal” we never should have accepted.
One undiluted bit of good news is that last month’s bitter winter has suddenly ended, as suddenly as a flash of lightning. All the bitching about how the unprecedented appearance of cold weather in the Northeast around the end of the year has abruptly fallen silent. Old Man Winter will return as soon as the next bad piece of economic news drops, of course, but at least he can relax on the beach for a while and enjoy his vacation without having a thousand quivering fingers pointed in his face.
Stronger-than-expected job growth and 280,000 new jobs is good. More of this in the coming months would be great. Of course, if we do get a quarter of sustained good employment news, the Federal Reserve will respond, which will feel bad in the short term, but be good in the long run – and it will be loads of fun to watch Obama supporters suddenly agree with critics of the monetary policies they’ve been defending for years.
Meanwhile, let those of us who noticed when the 400,000 returning exiles departed from the U.S. workforce wish them good luck in finding good jobs.