Are you not working a full 40 hours a week, though you would like to? A solid 4.1% of all workers report that they are, in technical terms, “Part Time for Economic Reasons”, which is to say that they’d jump at the chance for a full time job but don’t have one yet. It’s a decent improvement from the 5.3% in this position two years ago, when we last looked at the problem, but it’s still not good.
Worse, the San Francisco Federal Reserve, who studies the phenomenon, has come to believe that it’s a feature of the new economy.
How will we know when the economy is turning the corner towards real growth? Everyone has their own answer, but Fed Chair Janet Yellen told us last March what she has on her “dashboard”. As the most powerful person in the financial world, and probably the whole world, her opinion counts more than most. With the arrival of another piece of data on where we stand right now in the second quarter of 2014 (2Q14), it’s time to check in on how we’re all doin’.
What we see is that we’re making some substantial progress, but we still have an awfully long way to go before we can say we’re close to the last time everyone felt remotely flush, which is before the arrival of what Barataria calls a “Managed Depression” at the end of year 2000.
With so much economic data showered on us every month, about the last thing anyone needs is another number. It’s hard enough to keep track of what’s going on as it is, so more measures of the economy are not helpful. That is, they aren’t helpful unless they give us a particular insight that can’t be gained anywhere else.
This is probably why the more comprehensive U6 unemployment hasn’t caught on against the headline U3 unemployment figure, despite the latter’s obvious deficiencies. Two numbers causes confusion, one gives us clarity. Still, with the changes that are taking place in the economy and the slowness of the recovery, it’s worth taking at least a passing glance at anything that might help us understand where things are going in the future. More to the point, with wonderful tools provided by the St Louis Federal Reserve we can run a lot of custom charts to see what makes sense.
Let’s give it a go.
There’s been a lot of good economic news lately, the second year in a row that July uncharacteristically surged ahead. The “ISM Index” poll of manufacturers looked more positive than it has since 2008, even with a strong US Dollar. Initial claims for unemployment fell to 326k last week, another low since 2008. US GDP grew at 1.7% in 2Q13, not exactly great news but far better than expected (and accompanied upward revisions to previous quarters). The ADP employment report showed a net gain of 200k jobs, the rosiest figure of them all. Only 82k of those came from small businesses, with large companies gaining a new high of 60k jobs added – meaning that for the first time since 2008 big companies are in a hiring mood.
By the time you read this, the official Bureau of Labor Statistics (BLS) employment report for July should have come out, and it should be roughly in line with the more smooth ADP figure. Now that we are really turning a corner, as Barataria expected in 2013, it’s time to take an in-depth look at what “employment” means and why there’s still so very far to go.