Can the Job Market Continue to Pick Up Momentum?

Before I perused this morning’s employment summary from the BLS, I was not expecting much good news. While overall there is nothing spectacular to write about, there are some glimmers of hope.  The unemployment rate sat at 5 percent at the end of December, no change from last month.   But this does not tell us much about what’s really going on. Here are a few interesting stats:

  • Labor force participation rate: Unfortunately, it is still dismally low, but it is up one-tenth of a point from November, to 62.6 percent. However, the rate was slightly higher in December of 2014, at 62.7 percent.  Nonetheless, this is still the lowest rate in decades.
  • African-Americans: The unemployment rate among African-Americans has been depressing for years. The “economic recovery” that the administration has touted never seemed to reach them. But their unemployment rate is now 8.3 percent. That is still the highest of all race/ethnic groups, but it is a full two points lower than a year ago (when it was 10.4 percent).
  • Part-timers: Despite reports that Obamacare has created fewer full-time jobs and more part-time jobs due to its perverse hiring incentives, the number of workers who are working part-time because they could not find full-time jobs has declined from 2.4 million a year ago to 2.1 million now.
  • Discouraged workers: The number of “discouraged” workers (those who have given up looking for a job) has fallen significantly compared to a year ago, but has jumped up since November. This is not a seasonally adjusted number however. Discouraged workers are included in what is known as the U-6 rate, which includes those actively looking for work, discouraged workers, those who are marginally attached to the labor force, and those who are working part-time but prefer a full-time job. The U-6 rate is 9.9 percent – unchanged from November – but lower than it was a year ago (11.1 percent).
  • The largest job gains occurred in professional and business services, however, nearly half of those jobs were temporary.  Construction job growth ranked second, and the majority of jobs created were for specialty trades.  (This includes plumbers, electricians, concrete pourers – I’m telling you folks, if you don’t want to go to college, plumbing is where it’s at!)

Thus, despite an administration whose policies generally run counter to job creation, the year 2015 was much improved over 2014. Hopefully the momentum will continue and policymakers will lift the burdens of taxation, regulation and mandates that have prevented further labor market improvements.

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