You know it’s going to be bad, but it probably should be even worse.
Friday’s monthly employment report will show the U.S. losing at least 100,000 jobs in September, according to most forecasts, and maybe tens of thousands more. Yet the jobless rate is expected to send a more moderate signal, hovering just above 6 percent.
That’s not good, obviously, but it’s not so awful, either — if it were a true picture.
Don’t believe it.
The unemployment number understates reality even more than the consumer price index, which always seems to show low inflation except for the stuff that folks actually need to buy.
In the tradition of Florida election judges, the jobless count overlooks all sorts of people. Maybe its biggest failing, and to the extent that it provides a false sense of security these days, is its inability to account for the nation’s Ron Raneys.
As a former trading-floor worker turned home inspector and now retail clerk, the 50-year-old Raney certainly is employed. In fact, he also moonlights selling beer at Cubs and Sox games.
“It’s the American Dream,” he said with a laugh. “Two kids and two jobs.”
But Raney makes about 60 percent less than he did at his peak several years ago as an employee of the Chicago Board Options Exchange. And neither the jobless number nor its related data on the employment situation convey the instability, stress and downward mobility felt by so many Americans such as Raney.
First, he lost his CBOE job when screen trading made him obsolete. His home-inspector gig started with a bang in 2006 — “You couldn’t answer the phone quick enough,” he said — but the housing bust took care of that. Now he’s at Menard’s, just as consumer spending is set to decline on a quarterly basis for the first time in 17 years.
At least ballpark beer is still selling. Here’s hoping for a Cubs-Sox Series.
The government arrives at its jobless figure each month by surveying 40,000 households to ask how many people are working or searching for work. If the unemployed give up looking, as many do when the economy flags, the Labor Department no longer counts them. Imagine the thousands of former factory workers in that position.
If the unemployed return to school, they don’t count either. Nor do the 2 million-plus Americans in prison. Same goes for the growing number on Social Security disability relief. The rise in temporary help and part-time employment also chips away at the jobless rate, as does the aging of the population.
So with more people out of the picture, the indicator wouldn’t show it if today’s economy were as bad as in 1992, when the reading peaked at 7.8 percent, or in the Rust Belt bust a decade earlier when it hit 10.8 percent. During the aftermath of the 2001 recession, it never crept above 6.3 percent.
Whatever Friday’s data suggest, Raney knows the job market is rough.
“We have to be resilient,” he said. “If you can’t adapt, you go extinct.”
That’s true of people, no doubt, but apparently not of government indicators.
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