Unemployment Falls to 8.5%; 200,000 New Jobs Created

The “Nonfarm Payroll (NFP)” number of jobs being created came in at 200,000 on expectations of 155,000. The unemployment rate now stands at 8.5%, which is the lowest since February 2009.  Great news, isn’t it?  Well, not exactly unless you are entering the labor force as a temporary worker with virtually no benefits or job security, very low skill sets, and of course willing to work for the minimum wage.  See, I look at the number of manufacturing jobs being created as the basis for sustainable income growth.  For this month, manufacturing payrolls, which are those high paying jobs where you do need skill sets, rose only 23,000 on an expectation of 155,000.  That number is not good!

Here's the problem, the non-institutional working-age population went from 240.441 million to 240.584, a gain of 143,000 people of working age.  But the number of employed people went down from 141.070 million to 140.681, which is a loss of 389,000.  Adding the two, which is the correct way to measure the employment situation, the economy on a population-adjusted basis lost 532,000 jobs.  And, why is this an important measurement for overall economic health?  Well, it controls the taxing capacity of the government.  That is, more jobs simply means more tax revenues. 

Moral of the story, as usual, is to always look behind the scenes to discover the real truth, which is something the majority of the electorates don’t take the time to do!