A Reality Check of the Jobs Report
A Reality Check of the Jobs Report

By Patricia Tolson

According to the Employment Situation report released by the Bureau of Labor Statistics (BLS) on Feb. 2, the U.S. economy exceeded expectations by adding 353,000 jobs to the workforce in January. The unemployment rate remained steady at 3.7 percent. While the report and the White House suggest that the labor market is strong, the American public remains dissatisfied with the state of the nation’s economy.

Following the release of the report, the White House said in a statement on Feb. 2, “Let’s face it: the job market, along with the rest of the U.S. economy, has been defying expectations for a while now,” adding, “This upside surprise is largely consistent with a wide variety of recent indicators” and that “January’s 353,000 jobs number comes on the heels of an upwardly revised gain of 333,000 for December.”

In a Feb. 2 statement, President Joe Biden said, “America’s economy is the strongest in the world,” touting “another month of strong wage gains and employment gains of over 350,000 in January” as “more proof” that the economy is “continuing the strong growth from last year.”

However, recent polling shows that the majority of the American people do not agree with the president or the assessment of the White House when it comes to the health of America’s economy and jobs market.

A CBS/YouGov poll conducted between Feb. 12-14 shows that a total of 67 percent of U.S. adults believe that things in America are going somewhat badly (35 percent) or very badly (32 percent). A total of six percent say it’s going very well.

In rating the economy, a majority of U.S. adults (58 percent) said the state of the nation’s economy was either fairly bad (31 percent) or very bad (27 percent). A total of 37 percent ranked the economy as fairly good (27 percent) or very good (10 percent).

When asked about President Biden’s handling of the economy, 61 percent said they disapproved. Just 39 percent approved. On President Biden’s handling of inflation, 66 percent said they disapproved. Only 34 percent said they approved. On his handling of jobs and employment issues, 54 percent disapproved, and 46 percent approved.

In late January, an NBC poll showed similar results, as did a CNN survey.

According to EJ Antoni—a Research Fellow in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget—“The only ones who are fans of the economy are the ones who still have a job.”

While the unemployment rate looks good on paper, Mr. Antoni, whose research focuses on fiscal and monetary policy, said the number of jobs added “doesn’t tell the whole story.”

“There are millions of people absent from the unemployment rate calculation,” he said, explaining that “those labeled ‘not in the labor force’—an official category at the BLS—are not being counted among those unemployed.”

The Uncounted Unemployed

According to the Economic News Release by the BLS updated on Feb. 2, the total number of people “not in the labor force” in January was 101,113,000. The number of people “not in the workforce” in January 2023 was 100,892,000.

The BLS explains that those “not in the labor force” are defined as “those who have no job and are not looking for one.”

In January 2023, the number of people “marginally attached to the labor force”—described by the BLS as “persons who want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week, but had not looked for work in the past 4 weeks”—was an additional 1,434,000. By January of this year, that number rose to 1,757,000.

In January 2023, the number of “discouraged workers”—described as “those who did not actively look for work in the prior 4 weeks for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination”—was 349,000. In January of this year, that number increased to 466,000.

According to Mr. Antoni, counting these unemployed Americans classified by the BLS as “not in the workforce” would change everything.

“If you put those people back into the labor force, you end up with a much higher unemployment rate,” he said. “Adding those people back in results in an unemployment rate of around 6.3 and 7.4 percent.”

Asked why the BLS doesn’t add those classified as “not in the labor force” back into the workforce equation, Mr. Antoni said, “Consistency.”

“At the end of the day a lot of the figures we get from places like the Bureau of Labor Statistics are much more consistent than they are accurate,” Mr. Antoni said. “They’re measuring the same thing over time but it’s not the most valuable piece of information.”

‘Fueled Mostly by Part-Time-Job Growth’

As explained by the BLS, two monthly surveys are used to measure job numbers: the Current Population Survey (CPS) and the Current Employment Statistics (CES) survey.

The BLS says Census Bureau employees contact 60,000 eligible households for the CPS.

“The CPS sample is selected so as to be representative of the entire population of the United States,” the BLS explains.

“Survey respondents are never asked specifically if they are unemployed, nor are they allowed to decide their own labor force status. Their status will be determined based on how they respond to a specific set of questions about their recent activities. ”

For the CES, the BLS surveys 119,000 businesses and government agencies—cumulatively representing 629,000 of over 30 million worksites nationally—to estimate the nation’s employment levels.

As James Piereson wrote for City Journal on Feb. 14, part of the public’s frustrations with the job market is that its reported success “has been fueled mostly by part-time-job growth, rather than by the addition of full-time jobs.”

According to the Feb. 2 news release from the BLS, “Household Survey Data,” the number of people working part-time in January 2023 for “economic reasons” was 4,049,000. This year, that number rose to 4,442,000.

The number of people working part-time for “slack work or business conditions” was 2,683,000 in January 2023. This year, that number rose to 2,994,000.

The number of people who could only find part-time work totaled 993,000 in January 2023. This year, the number is 1,026,000.

Those who worked part-time in January 2023 for “noneconomic reasons” was 22,016,000. This year, the number rose to 22,156,000.

The BLS also reported that the average workweek for all private nonfarm payrolls decreased to 34.1 hours per week in January. The average workweek for production and nonsupervisory employees fell to 33.5 hours per week.

As noted by Mr. Piereson, “The household survey suggests an explanation for why Americans don’t perceive a robust labor market: from their point of view, it isn’t robust.”

“The disparity between the two surveys should caution those who follow monthly employment reports to look beyond the headline numbers in the payroll survey to see whether they are consistent with estimates in the household survey or with employment estimates provided by ADP and other firms that follow the job market,“ Mr. Piereson proposed, adding, ”If those figures do not match, then it’s fair to conclude that the employment picture is more complicated than portrayed by the headline numbers.”

According to a January press release from ADP Research, the private sector only gained 107,000 jobs, primarily in the service-providing sector.

Unlike the survey-driven jobs added numbers reported by the BLS, ADP Research Institute says it provides “data-driven” numbers “derived from actual, anonymized payroll data of client companies served by ADP.”

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