Viewing Payrolls As A Product Of A Shrunken Economy

The numbers all change with each month, but nothing really changes. And that includes how the economy changed in 2012 and clearly again in 2015. By raw count of the payroll figures, there were positive numbers in every location in the latest update as only full-time employment was close to zero growth (only +3k for November). The labor force grew for the second straight month which brings the total for the year since January back to just even. And the Household Survey has gained only 1.16 million in those ten months compared to the 2.11 million in the Establishment Survey.

So nothing much has rehabilitated as divergences continue to abound. In a virtual repeat of late 2012/early 2013, only the Establishment Survey appears unfazed by economic weakness spread everywhere else.

The civilian non-institutional population, those 16 years and older available for work, the potential labor pool, has grown by 2.1 million in those ten months but only a small handful have joined the continued robust jobs market? It may be that the economy is still working off the “slack”, the ongoing pool of previously unemployed, leftover from the Great Recession, but that qualifies as something other than a recovery.

As it was, by count of the BLS it took this “cycle” 95 months to close the gap with the prior cycle peak in terms of full-time jobs. In the past two recoveries, neither of which would be characterized as historically robust, the deficiency was rebounded in just 43 and 41 months. This accounts for a great deal of the confusion about the jobs market and labor interpretation.

By that I mean the narrow focus of economists on the slope of the return trajectory 2010 and forward against the broader focus of “Main Street” which has no luxury of deflating scale. The unemployment rate is confirmation of the slope for economists, but the participation rate is the real economy’s ongoing suffering. If there was an actual recovery, one which closed not the calculated slack of “secular stagnation” that continually writes down “potential” to whatever deficient level exists at any time, the American economy would be almost 14 million full-time jobs ahead of November 2007 rather than just barely equal to it. From that point alone, China, Brazil and even Canada would not be staring now into the yawning abyss.