The stock market is ecstatic because the US Bureau of Labor Statistics reported today that the economy added no fewer than 146,000 new jobs last month, and that unemployment dropped to 7.7% in the same period. Handstands and tickertape parades all around.
Further down it does note that construction lost 20,000 jobs and that manufacturing “changed little,” losing 8000 jobs, but we are not going to sweat the details, you know. Gains were in retail trade, professional and business services, and health care. So we are selling each other televisions and clothing, handling each others’ money, and taking each others’ temperature. Some economy.
Why this increase of 146,000 is so exciting is sort of odd, because the increase in September was 148,000, and for October it was 171,000. Oh wait, the September number was revised downward to 132,000, and the October number was revised down to 138,000. So look for this 146,000 to be reduced in the future.
It gets worse, because further down are even more details, and maybe we should sweat the details. A lot of people must have lost jobs, because despite adding 146,000 new jobs the number of people who are employed decreased by 122,000 last month, and the number who were unemployed rose by 229,000.
The population increased by 191,000 in that period, but somehow the labor force declined by 350,000 at the same time. If you are noticing that some of these numbers are not adding up, well, yes, so am I.
The decline of the number of people in the labor force is the entire reason for the reduction in the unemployment; not most of it, or any part of it, all of it, because the number of people employed decreased and the number of people unemployed increased. And the decline in the labor force was almost two times larger than the increase in the population.