The Latest Employment Scenario

There's a need to make sense of the numbers when it comes to employment statistics in the US, and we would have a look at how both employment and unemployment rates can continue to fall at the same time – a phenomenon we term as Carroll’s Paradox. But first, let’s have a look at the latest numbers and views about the employment scenario in the U.S.A.

The Okay Part:

• Great going, poor showing: April job numbers looked good but fell short of expectations.
• The Euro is losing balance and leaning on the Dollar to stay upright. The chances are, when it fails, it might try to drag the Dollar to the grave along with it, and at the very minimum would leave damage behind
• At least 20% of US exports are destined for Europe and the current economic crisis is hurting the export sector as well as recruitment and growth

Don't Worry, Be Happy:

• Companies added 115,000 new jobs in April, not good enough, but at least better than stagnating.
• The private sector added 130,000 employees to payrolls
• Professions and services consisted of about 62,000, or roughly half of the growth in employment
• However, analysts are critical that at least one-third of the new jobs added in April are temporary in nature. Other analysts say the concept of a permanent job died in the 20th century, and there's nothing to worry about by differentiating between permanent and temporary jobs in this economy.
• According to the BLS, at least 1.5 million jobs have been added in the professions and services sector since September 2009
• Temporary help went up to 21,000 documented jobs in April
• Curiously, job growth in computer systems design and related services was the same as the job growth in architectural and engineering services. Both sectors witnessed a job growth close to 7000 positions.
• Retail trade employment added 29,000 positions while general merchandise stores added another 21,000 in April. Building material and garden supply stores added a few more jobs.
• Since December, the building material and garden supply stores have managed to add only 19,000 jobs, as the market is heavily dependent on real estate development, which is in doldrums.
• Healthcare added more than 19,000 jobs in April with employment in home health care and physicians' offices adding at least 15,000 jobs
• Since most entertainment is beyond reach of ordinary people, eating and drinking has gained prominence, with food services and drinking places adding at least 576,000 jobs since February 2010. The sector continued its healthy trend and more than 20,000 jobs were added in April.
• Manufacturing seems to be inching ahead with more than 16,000 jobs added in April. At least 6000 jobs were in fabricated metal products and 5000 in machinery. Since January 2010, the manufacturing sector has added at least 489,000 jobs.

The Ugly:

• Rising oil prices and other issues hit the transportation sector and Transportation and Warehousing lost 17,000 jobs in April.
• Employment in other industries like mining, construction, information, financial activities etcetera changed little
• There are still 13.7 million jobless according to government data
• The job growth rate has almost halved since January
• An estimated 3,42,000 people dropped out of jobs in April
• Unemployment rate fell from 8.2 percent to 8.1 percent not because of growth in jobs but because of disenchanted workers leaving the workforce, but who do not qualify as jobless
• Government spending has fallen for six straight quarters

The Questionable:

• Even after weak employment growth in April, the numbers of claims for jobless benefits continue to drop in May
• Claims for state unemployment benefits fell by 1000 in the first week of May
• The trade gap jumped by a huge 14.1 percent ending at a gap of $51.8 billion in March
• Exports grew by 2.9 percent in April, while imports grew by 5.2 percent

It's difficult to see an unhealthy economy where imports are greater than exports, but there are so many factors involved. Not the least of which is that US exports consist more of higher priced goods than the kind of goods that is being imported.

Carroll's Paradox:

The system to count the number of unemployment was established in 1878 by Mr. Carroll D. Wright who firmly believed that there weren't so many people out of work as it seemed. He called it “industrial hypochondria” and to fight it he designed the first survey of unemployment in the US.

The system mandated that town assessors estimate the number of unemployed by taking into count only those who had no jobs but “really want employment.” Wright admitted that by his act he was leaving out a large number of people who would have worked provided they found a job or opportunity that was acceptable to them.

So, the results obtained by Wright in the first survey of unemployed were encouraging, and has continued to be encouraging till this day. Carroll Wright later became the inaugural director of the Bureau of Labor Statistics, went to Washington, and created numbers and statistics happily ever after. His method for “not counting” the unemployed became the basis for counting the unemployed by the BLS.

This is why in the U.S. you see employment and unemployment numbers dropping at the same time – it's Carroll's Paradox.