By Frank Stricker
September 15, 2024
There were few big changes last month. The overall unemployment rate fell by a tenth of a percentage point to 4.2%. The Black rate fell .2, the Hispanic rate rose by .2, and the Asian rate was up .4. The rate for teens increased by1.7%, and for Black teens alone it was up 4.6%. Teen rates seem to seesaw a great deal every month. I am not sure why. On the whole, the changes in the August numbers were small, but quite a few were heading in the wrong direction.
And other employment indicators were worrisome. Growth in the total number of non-farm employees—data that come from employers’ reports—has been pretty weak in recent months. Some commentators seemed relieved that the August numbers weren’t worse, but 142,000 added non-farm workers is not a strong showing.
The number of job openings that employers have posted, according to the most recent available data for July, was just 7.7 million. The National Jobs for All Network’s estimate of the number of people who want jobs or want to move from part-time to full-time work was 17.4 million in July and 17.5 million in August. Other worrying signals include the fact that manufacturing employment dropped by 24,000 jobs in August, and that other sectors, including finance, insurance, and real estate, have seen a slowdown in hiring. Also, there are reports that college grads are having trouble landing jobs.
On the plus side, there has been no noticeable increase in the number of people filing for unemployment benefits, even though the expert at New York Times reports every week that filing claims are rising.
As of July, monthly hiring numbers and rates in the private sector have not moved much, but the negatives about job markets that are revealed in anecdotal accounts could show up in the hiring numbers we get for August and September.
Some employers must be putting hiring plans on hold until they see what the Federal Reserve does this month. No interest rate cuts or just a quarter of a percentage point cut would not be helpful. The Fed will probably have met and acted by the time you read this.
Two Other Numbers to Know About: Real Wages and Real Poverty
Real (in purchasing power) hourly pay for rank-and-file employees rose by 1.5% over the last year. That’s a plus. But there’s a long way to go to a comfortable wage for a huge chunk of the labor force. The average hourly wage was $30.27 in August. That looks pretty good–$60,000 for a full year of work—but that is the average and that means that half or more than half of the workers earn less, and some earn much less.
Meanwhile, the Census Bureau issued its poverty report on 2023 last week. We get two poverty rates because the Bureau added a second rate–the Supplemental Poverty Measure (SPM). The SPM includes a more comprehensive picture of people’s income. The total poverty rates in both measures are not too far apart, but last month they moved in different directions. By the official poverty measure, the poverty rate dropped a bit from 11.5% in 2022 to 11.1% in 2023. According to the SPM, the poverty rate increased by .5 of a percentage point to 12.9%. For now, I’m sticking with the old method, for which we have a series that runs back to 1959. The SPM begins in 2009.
And the biggest point about both these measures is that they use poverty lines (aka thresholds) that are so low as to be laughable. Using the old lines, if you were a family of four with two children and your annual family income in 2023 was more than $30,900, you were not in the poverty population. I kid you not. And the SPM thresholds are not much better. If we are going to add alternative poverty measures, why not start with more realistic poverty lines?
Frank Stricker is on the board of the National Jobs for All Network and writes for NJFAN and Dollars and Sense. In 2020 he published a book called American Unemployment: Past, Present, and Future (2020). He taught History and Labor Studies at California State University, Dominguez Hills, for 37 years.
