The 2010 Job Market, Part II

As Stanford’s Class of 2010 dives into the working world, the job market numbers look pretty grim, but not as grim as you may think.

British newspaper The Telegraphparses some economic data:

The share of the US working-age population with jobs in June actually fell from 58.7% to 58.5%. This is the real stress indicator. The ratio was 63% three years ago. Eight million jobs have been lost.

The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weniger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.

“Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2 million.”

In response to this sort of rhetoric, bloggers for First Trust did some of their own parsing:

For example, every ten years the United States Government conducts a census, and every ten years the government hires hundreds of thousands of very temporary workers to help in the effort.  Sometime between April and June total employment goes up and down by an amount that often swamps the underlying trends of employment.

In May, total payrolls increased 433,000, but then fell by 125,000 in June.  So rather than explain this to people, the Pouting Pundits of Pessimism said things like “all the jobs in May were government jobs.”  And then last Friday, after the June jobs report, they said “jobs fell for first time in seven months.”  Both of these reactions were misleading.

They could have said “once we adjust for the census, private sector payrolls increased by 33,000 in May, and then accelerated in June to 83,000.”  While both months were disappointing when compared to previous recoveries, the data shows six consecutive months of private sector job creation.

So, Class of 2010 — the job market is still bad. But, thankfully, not quite as bad as 1932.

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