Unemployment claims soar as U.S. industry collapses; MSM touts growth in lowest-paying jobs instead
J. D. Heyes
According to published reports, the U.S. economy grew by nearly 300,000 jobs in February, making the unemployment rate fall to 5.5 percent – the lowest of President Obama’s tenure – so the nation is well on its way to post-Great Recession recovery, right?
Not so fast.
As reported by USA Today March 6:
The BLS revised January’s job gains to 239,000 from 257,000 and left December’s 329,000 estimate unchanged, for a total downward revision of 18,000. Job gains have averaged 288,000 a month the past three months. Nevertheless, February was the fourth-best month for jobs since January 2014.
“The upside surprise should no longer be a surprise because, despite what many pessimists wish to believe, the economy is expanding at a healthy clip and creating high variety jobs again,” Todd Schoenberger at LandColt Capital told CNBC.
While that sounds positive at first blush, the realities of those figures, along with some other details about employment and the U.S. economy, tell a much different story.
For instance, on the heels of such glowing employment reports comes another that appears to undercut it: Market Watch reported March 5 that new unemployment claims climbed to their highest level since May 2014.
Good-paying jobs getting more scarce
“Initial jobless claims climbed by 7,000 to 320,000 in the period stretching from Feb. 22 to Feb. 28, the Labor Department said Thursday. New applications for unemployment benefits are now running just 1.5% below year-ago levels, and they have risen sharply after falling near a 14-year low of 267,000 in late January,” reported Market Watch.
What is also happening is that, while there has been some job creation, much of that has occurred in low-paying job sectors, even as jobs in higher-paying sectors, like energy, are vanishing.
As reported by Tyler Durden over at Zero Hedge, 38 percent of all job cuts in 2015 have come due to lower oil prices, with more on the way.
“Employers announced 103,620 planned layoffs through the first two months of 2015, which is up 19 percent from the 86,942 job cuts recorded during the same period in 2014,” added the labor analysis firm Challenger, Gray & Christmas.
Also, noted Durden, citing the Challenger data, cheaper oil prices did not appear to be helping the rest of the economic or labor sector:
Cheap oil does not yet appear to be helping stem the tide of job cuts in the retail sector, which saw the second highest number of job cuts in February with 9,163. Employers in the sector have announced 15,862 job cuts, so far this year. That is little changed from the 15,242 retail job cuts announced in the first two months of 2014.
In a separate post, Durden discussed the wage picture, noting that month after month, the Bureau of Labor Statistics has promised there would be wage growth, though there has not been.
In a March 6 post Durden – citing February’s BLS report, noted that the most job growth occurred in the least paying sectors of “Leisure and Hospitality” (66,000 jobs); “Education and Health” (54,000 jobs); and “Retail Trade” (32,000 jobs).
This, despite Labor Secretary Thomas Perez insisting at the release of the latest report that the “quality of jobs is going up.”
“Together these three job categories accounted for 152K jobs, or more than half the total February job gains. They also represent the lowest paid jobs in the U.S.,” writes Durden. “And that’s why there is no wage increase.”
What’s more, the nation’s economy – thanks to a number of Obama administration policies and initiatives – is being transformed into a part-time endeavor.
As reported by CNN/Money in November, the “part-time economy” is “America’s Hidden Job Problem:”
Overall U.S. unemployment has fallen steeply in the past year (from 7.2% in October 2013 to 5.8% in October 2014), but too many people can only find part-time positions.
The number of people working part-time involuntarily is more than 50% higher than when the recession began.
There are many dynamics to an economy and labor market as large and diverse as America’s, but that said there is much more to making it healthy than simply saying it is.