The two best-publicized indicators in any jobs report are the headline unemployment rate and the net number of nonfarm payroll jobs added. In the latest report, covering the month of September, both indicators tell a very encouraging story: Unemployment dropped to 5.9 percent as the economy added a net total of 248,000 jobs. Yet as Annie Lowrey of New York magazine writes, “A broader set of indicators generally gives a dimmer view of the economy — and that remains true this month, good headline number aside.” On Friday I discussed two of those other indicators: the labor-force-participation rate (which last month fell to its lowest level since February 1978) and the growth of private average hourly earnings (which clocked in at only 2 percent over the past year).
Another key indicator is the so-called quit rate, which measures the pace at which workers (excluding retirees) are voluntarily leaving their jobs. (A jump in the quit rate suggests that the labor market is becoming more fluid, and that workers are becoming more confident about their prospects.) This rate has been stuck at 1.8 percent since February. As I’ve noted before, that’s exactly where the quit rate stood at its trough following the 2001 recession. Prior to the 2007–09 recession, it reached a peak of 2.3 percent.
A few other things to keep in mind:
(1) The U-6 unemployment rate — which includes, not only the officially unemployed, but also people who are “marginally attached” to the labor force and people who are working part-time jobs for economic reasons — was the same last month (11.8 percent) as it was in October 2008, at the height of the financial crisis.
(2) As Bloomberg News correspondent Jeanna Smialek points out:
“Forty-nine percent of people working less than 35 hours a week in 2012 and desiring full-time work were able to find such a position within a year, according to research by the Federal Reserve Bank of Atlanta. That’s down from 61 percent in 2006.
“In addition, the almost 3 million Americans unemployed for at least 27 weeks are more likely to accept part-time jobs than counterparts out of work for shorter periods, according to a Chicago Fed paper.”
(3) From the Los Angeles Times:
“One in five U.S. workers was laid off in the past five years and about 22% of those who lost their jobs still haven’t found another one, according to a new survey that showed the extent Americans have struggled in the sluggish labor market since the Great Recession ended.
“Those who did find work had a difficult time with their job search and the effects of unemployment, the survey by the John J. Heldrich Center for Workforce Development at Rutgers University found.”