The shrinking jobs market

One of the big stories today is the net loss of 17,000 jobs in the non-farm labor market.

The December jobs number was revised upwards to 82,000 jobs from an original estimate of a net gain of 18,000.

It's hard to know what to make of this one month report. It's important to keep in mind that there is always a seasonal loss of jobs in December as retailers and related industries shed their holiday help. The BLS is supposed to seasonally adjust but as you can see from the December numbers, it's not perfect.

The bigger issue is the labor market's inability to keep up with population growth. The labor market needs to grow by about 150k jobs every month just to accommodate population growth. Over the last 7 or 8 years jobs have failed to keep pace with population growth which is perhaps the biggest reason why Bush's so-called 'boom' economy has been lost on working Americans. The unemployment rates goes down despite net job loss because the BLS stops counting anyone who remains unemployed for 6 months on the assumption that they don't want to work.