August 2013 Employment

The labor market continued to improve slowly in August according to the Bureau of Labor Statistics (BLS). The unemployment rate fell to 7.3 percent from 7.4 percent in July. The economy generated 169,000 jobs in the period. The average work week ticked up by six minutes and average hourly earnings increased by 0.2 percent.

To suggest the labor market remains weak despite the positive figures in headlines is not letting the cat out of the bag. Most folks Atlas encounters are not impressed by the improving statistics. Seeing figures like the 169,000 new jobs and a falling unemployment number on the front page of your favorite newspaper or website appears encouraging, but digging further into the labor situation better illustrates the state of the jobs market in America. The tallies of new positions created in the prior two periods were revised down by a combined 81,000. The biggest contributor to the fall in the unemployment rate continues to be the falling participation rate. Americans are leaving the workforce, and if a person is out of the marketplace, she is no longer counted in the jobless tally. The unemployment rate is at its lowest figure since December 2008, but it took 312,000 Americans leaving the working ranks in August for the headline number to look so favorable. The unemployment rate may be the lowest in years, but the labor participation rate is the lowest in decades; it was August 1978 when the percentage of Americans participating in the labor market (63.2 percent) was this low.

Unfortunately, the BLS does not expect the participation rate to improve over the next seven years! In fact, it projects the 2020 rate to fall down to just 62.5 percent. The only group expected to increase their working percentage before the beginning of the next decade according to this agency’s website is workers 55 and over. It will be interesting to see how the younger cohorts spend their time when not punching a clock. (by. C. Cox)