The Associated Press, the nation's de facto business news gatekeeper for those who don't follow the economy or the markets closely, is telling America that the U.S. job market is fine, and ignoring the dismal results seen in weekly pay during the past several months.
Christopher Rugaber's Friday evening coverage of the government's jobs report earlier in the day described the reported 215,000 in seasonally adjusted payroll job additions as "last month's healthy hiring." Paul Wiseman, in a separate dispatch dealing with downbeat news in the University of Michigan's consumer confidence survey, which had the worst reading in five months, insisted that "the job market is healthy." Well, more people are working, but even with their slightly larger numbers, they're collectively working fewer hours and earning less total pay than they were two months ago.
The average work week fell from 34.6 hours in January to 34.4 hours in February. Defying expectations, that figure held steady in March (source data for these graphics is at Tables B-1, B-2 and B-3 in last Friday's full Employment Situation Summary release):
Despite the jobs added, only about 40 percent of the hours lost in February were recovered in March. (Seasonal adjustments take care of the differing number of business days in each month, so comparisons of what individual weeks within each month look like are valid.)
Pay didn't improve much either.
After February's originally reported drop in weekly pay of $6.11, many of the excuse-makers pointed to a quirk in the government's methodology which might have caused some pay raises to be missed. The government uses the week containing the 12th day of the month for its surveys, meaning that it missed many people on twice-monthly pay arrangements who supposedly weren't paid until Monday, February 15.
While that theory seemed potentially plausible, March's weekly pay results, which were expected to get back what was lost in February, got far less than halfway there. February's weekly pay drop was revised down to $5.77, but March's weekly pay increase of $2.41 made up only about 40 percent of February's decline. (I would contend that the excuse-makers were wrong anyway. February 15 was a banking holiday, and most of the people normally paid that day would have had direct deposits hit their accounts the previous Friday.)
As a result, again despite larger number of Americans on company payrolls, aggregate earnings in March were still slightly below January's total:
Both Rugaber and Wiseman at AP seemed to be a bit befuddled at how the job market can be so "healthy" while the economy's growth continues to falter.
Rugaber's "there's no trouble here" reaction: "Last month's healthy hiring comes even as growth has showed signs of slowing. That suggests employers see the tepid growth figures as temporary." No Chris, they've cut back on how many hours they're working their people, while hiring only marginally more of them. In the aggregate, they're not paying out more money in salaries. That's not a sign of confidence in future growth.
Wiseman vaguely wrote that "Signs of economic weakness and rising gasoline prices have taken a toll on spirits." He cited "weak consumer spending," but didn't explain how that could be occurring with"healthy" job growth. The two graphics above explain how. Workers aren't getting as many hours, and in the aggregate they aren't making more money. They aren't spending more because they can't do so without incurring even more debt than they already have.
The weak situation in weekly pay has persisted for several months.
Rugaber cited the 2.3 percent increase in average hourly pay in the past 12 months as "a faster pace than the first few years after the recession, but still about a percentage point below the rate that is typical for a healthy economy." It's worse than that, though, because of the shorter work week. March's average weekly pay was only 1.95 percent higher than it was 12 months ago. That's bad enough, but it was an absolutely puny 0.34 percent higher than November.
For several months, Moody's Chief Economist and $2,700 Hillary Clinton campaign contributor Mark Zandi has been fond of saying that we should believe the somewhat decent job-growth numbers over the recently weak GDP growth figures because "we can count jobs."
I say that once you look at the situation with employee pay, you can buy into the idea that the GDP growth figures are legitimately as weak as they are because we can count hours worked and dollars paid — and they've both flatlined.
Cross-posted at BizzyBlog.com.
