The most recent biggest headline grabber that the Bureau of Labor Statistics (BLS) released was its October payroll job numbers – announcing that a remarkable 271,000 jobs were created. This number is well over the consensus expectation of 184,000. This was the highest print since December of 2014, and those new jobs dropped the headline unemployment rate to 5%, the lowest since April of 2008. The media and government are sure to focus on these two numbers. This may sound great in theory but it’s important to delve deeper into what these number truly mean.
A full 54% (or 145,000) of those jobs were added to the total because of something called the birth-death model. According to Dawn J Bennett, the author behind the article, “The birth-death ratio is a number representing the net jobs provided from newly started business vs. business closings during the reporting month. The BLS uses a rolling average to determine the monthly total based on historical averages over the past several years. That sort of math assumes an economy that is functioning normally, which ours has certainly not been for the past seven years, and so that figure of 145,000 jobs is, simply put, fiction.”
There are even more disturbing trends within the overall picture. According to the BLS, 271,000 of these jobs can be accounted for by employees age 55 or over, while males between 25 and 54 lost 119,000. Also, multiple job holders increased by 109,000. This means that that older Americans are taking part time jobs, and some of those losing full time work are taking multiple part time positions to compensate. The jobs are mostly low-paid personal service jobs such as food service, retail, temporary work, and healthcare services.
It’s not hard to see from these numbers that young people aren’t in the position to build households or plan for the future; 50% of 25-year-olds live with their parents.