The American economy gained 20,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at -70,000 jobs. The unemployment rate declined to 3.8 percent.
As bad as this looks, the underlying numbers are a little more comforting. The number of employed people went up by 255,000 and the number of unemployed went down by 300,000. On the other hand, nearly 200,000 people dropped out of the labor force, which is a pretty high number. The labor participation rate stayed steady.
Wages were a mixed story. The hourly earnings of production and nonsupervisory workers went up at an annualized rate of 4.3 percent, which comes to about 2.8 percent when you account for inflation. However, weekly earnings went down by 3.1 percent, which comes -4.6 percent when you account for inflation.
I don’t really know how to react to all this. The raw jobs picture is obviously terrible, but everything else—the rise in employment, the participation rate, wages for blue-collar workers—looks pretty good. I’m tentatively going to say that I think the jobs number is a blip and we’ll return to decent job growth next month. But my confidence in saying this is fairly low.