The real unemployment rate – February 2020
Bottom Line: What more could we have asked for to start the new decade? Already entering the new year and decade with the lowest unemployment rate in 50 years – we received an incredible jolt of job growth,225,000 new jobs added in January. This number, which factors in government jobs as well, was foreshadowed last Wednesday when the remarkable ADP private sector jobs report revealed a stunning 291,000 jobs being added – the best month in five years. As always, it’s important to delve in beneath the headlines to find the real storylines. And that’s especially true in this month’s report. There’s a huge storyline waiting to be told...but first we will start with the headline stuff.
- Unemployment rate 3.6% (+.1)
- +225,000 jobs
- Positive revisions from previous months totaling +7,000 jobs
Top industries for hiring:
- #1 Healthcare
- #1 Leisure and hospitality
- #3 Transportation and warehousing
Important notes:
- Factoring in the revisions, the real number was +232,000 jobs added
- Leisure and hospitality along with transportation gains demonstrate the continued strength of consumer spending – a leading indicator for the US economy as it accounts for about 70% of all economic growth
Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:
- Actual: 6.9% down from 8% year over year
Key takeaways:
1. A month after reaching a record low “real” unemployment rate – we saw a slight bump higher despite the huge job growth as 574,000 people who’d previously not been in the workforce decided to reenter to start the new year on back of the great opportunities.
2. Those unaccounted for in the base unemployment rate include 6.7 million Americans (1.2 million long-term unemployed, 4.2 million are underemployed & 1.3 million are marginally attached to the workforce).
3. The labor participation rate continues to improve year over year with more people joining the workforce with unprecedented opportunity.