The real unemployment rate – February 2021
Bottom Line: The ADP private sector jobs report provided the first glimpse last Wednesday into an improved employment picture to start the year compared to what we’d experienced to end the previous one. Friday’s government employment report confirmed as much. The news was far from great in January, but adding jobs, any number of them, is better than the inverse.
First, the headline numbers from the jobs report:
- Unemployment rate 6.3% (down .4%)
- +49,000 jobs
- Negative revisions from previous months totaling 159,000 jobs
What we learned through revisions from prior months was that the employment picture in November and December, as several states ramped up lockdown measures once again, was even worse than we’d already known. On balance this report is a negative one for jobs, however the hope is that we bottomed in December and began what will hopefully be a renewed jobs recovery in January.
The real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:
- Actual: 12%, up from 11.6%
There are currently 14.9 million people who are long-term unemployed, underemployed or marginally attached to the workforce which make up the difference between the base rate of 6.3% and the real rate of 12%
As for Demographics...
- The unemployment rate was essentially flat to slightly improved for all ethnicities and ages
As for Money...
- The average hourly wage rose by 6 cents per hour during the month $29.96
- The average full-time income is currently $54,527 a gain of $738 over the prior month
The news generally continues to be great for those who are fulltime employed with wages and hours worked continuing to rise well above year ago levels. This continues to be a jobs economy of the haves and have nots. Those who are fulltime employed are generally earning more than they ever have, including a near 6% increase in earning year over year. For those without employment, the competition for employment is the most challenging it’s been in around eight years. The overall unemployment rate masked an additional 800,000 Americans who became part of the long-term unemployed, underemployed or marginally attached group of desirous workers.
The job’s report shows some hope that maybe January could be a positive turning point but that we have a long way to go to get our jobs economy back. There are nearly as many Americans in need of work reflected in the base unemployment rate as there are that aren’t reflected by it. Until next month’s report...
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