The Indicator from Planet Money - Jobs Friday: Extremely Not Good

The US economy created 49,000 jobs last month, according to the Bureau of Labor Statistics. That's a lot less that people had hoped and shows that the recovery has slowed.

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NPR

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heroin Patty Cardiff here. This is the indicator from Planet Money. And today is jobs Friday. That's right on this morning. The Bureau of Labor Statistics released the employment situation report. That's a support to you tonight for the month of January and it revealed that the economy created only 49 stars and jobs last month. So that is today's Planet Money indicator 49,000. This number was worse than Economist had expected in the picture actually becomes even darker if you look at the longer-term trend back in August September and October of last year. The economy was creating almost a million jobs per month on average as the economy recovered from the pandemic recession before the last three months as there was a surge during the winter in coronavirus cases. The economy has been creating only about 29,000 jobs per month for the recovery is not necessarily going into reverse, but it's fair to say that

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The top-line figures in the reports and hear the indicator. We like to go behind the numbers would like to find the indicators that a very deep inside these monthly reports that they give context to what's really happening in the labor market. So we've called up three of our favorite labor market experts. These are people who just eat those labor market details for breakfast and who I guess, you know drink jobs Friday charts for the evening cocktail or something. I don't know what that mean. What I think what it means is we need to have an indicator cocktail. That's what I mean. And after the break each of our three guests will share with us one indicated that they have pulled from the reports and it tells why that indicator explains so much of what's Happening Now in the labor market

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Support for this podcast in the following message come from each raid. You want to invest your money but there's one problem. You're not sure where to begin. Luckily. There's E-Trade who offers more than just trading you trade simplifies investing without the financial. Jargon and has the people to offer guidance and support to make your money work hard for you for more information, visit etrade.com and PR E-Trade Securities, LLC member finra Civic roster of Labor Market experts is Nick bunker. Nick is the economic research director for North America at the indeed hiring lab. So my indicator is the gap between current employment and what we're seeing in February 2020 before the pandemic. So as of January, there are 9.9 million a few more jobs than we saw before the pandemic Rose 9.9 million fewer jobs represents the decline of a bite six and a half percent is Nick explains. This is a human.

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Angus cat that is worse than the absolute depths of the Great Recession. Remember the Great Recession of 2008 one not to forget at its worst point in terms of jobs lost. It was still not as bad as what the labor market is right this very moment. Of course that is just the overall Gap. The damage has not been spread out evenly across the labor market some parts were just hit a lot harder than others and it says there are a few Industries in particular that account for a huge share of the jobs that are still missing for example jobs in the food services and preparation industry. That's basically restaurants and bars. That industry alone is responsible for about 24% of that 9.9 million jobs Gap, but then you add in a combination that makes me hotels and then you add in amusements gambling and Recreation casinos. Essentially those three Industries alone are responsible for 37% of that total job scam.

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Nick says the concentration of job losses in specific sectors also shows how important it is to get this virus under control the government attempts to stimulate the economy through various bills do help limit the damage but for a full recovery depends I make itself must be defeated or people can have more money and their checkbooks to go spend at restaurants. But if they are concerned that they might catch a disease while going out to dinner then I will likely spend money there and that means there's more people hire those positions Anonymous correspondent at the Washington Post is the number of people who dropped out of the labor force. So they stopped looking for work. They didn't get a job and they just basically quit and that number was really high 406000 people just said forget it on on even looking for a job in January and there could be a few things happening.

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Completed with the recovery stalling a lot of people have become less hopeful that there is work out there. So they've just stop looking another thing that might be happening. It's at the decline in the labor force also reflect a particular challenges of the pandemic and it's this ongoing story of people struggling to balance their work-life with caring for kids and dealing with virtual schooling and in dealing with Copic cases with family members who are L. This is the reason we see this drop out and Heather are the specific sectors of the economy that have been damaged the most also means that the people who are most likely to work in those sectors are often the ones most likely to leave the labor force. These are the people who are in these low-wage jobs were in the restaurant in the hotels in the travel industry that continues to get hit really really hard. And of course, these are the people who we know have less savings and we know really need the extra help right now.

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Jobs day expert is Adam. Ozimek. Adam is the chief Economist at upwork a job posting site for Freelancers and businesses. And here is his indicator from the jobs report permanently unemployed. The permanently unemployed requires a wee bit of explanation of every month the government surveys unemployed people to ask them about the nature of their unemployment and specifically asked people who lost their jobs if they expect to return to work within 6 months. If so, if they say yes, then they are categorized as temporary job losers, but if not classified as permanent job losers right now. Adam says a lot of the jobs lost so far are still considered temporary wake back up from the pandemic Swamp People can go back to their old jobs, but permanent job losers cannot their jobs are gone what we learn in this morning's jobs report for the month of January. There were three point five million permanently unemployed individuals.

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it went up a little bit from December but the more important part is how elevated it remains compared to a year ago which is 2.2 million an extra 2.2 million people have lost jobs that are not coming back those people when they want to go back to work will have to find brand new jobs and Adam says this matters because it's harder for businesses to create new jobs that it is to rehire people who are only temporarily laid off to even if the population gets vaccinated in the economy starts reopening it's not automatic the people who lost their previous jobs permanently will quickly get hired so even when we have this pretty quick bounce back that's still a decent size for session to dig out of and that's going to take time to take stimulus a new jobs are created by the one you businesses are created when existing businesses expand our operations

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So that they'll take the chance on forming your relationships with new employees. I'm with you customers. There are two parts to this recovery one is for the economy to reopen so that people who lost their jobs. Only temporarily can get back to work. The second part is a little harder getting the economy to grow fast enough the people who lost their old jobs entirely can find new ones which means Adam says that the number of permanent job losers may not start going down for some time and it's not the kind of thing that we could turn around tomorrow, even if we wanted to because the economy is shut down and it's going to be shut down until the virus is gone. So, you know permanent job loss is not going away until the fire's goes away links and charts related to today's jobs report to NPR. Org money was produced by Timbaland fact check by SanSai indicator is a production.

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