The 2021 job market is a good bet to look like this.
Let’s first get one thing out of the way: that the American job market has to get better because it can’t get any worse. That’s not optimism; it’s fatalism, and it’s (a) way off the mark, (b) pessimistic, (c) flat out wrong if you know the history of our job market, and (d) ignorant of the nature of the American job market.
A living, functioning organ
Including the panic of 1785 – America’s first recession, shortly after our economy opened with a flurry of expansion encouraged by our triumph in the war for independence – we have lived through 50 recessions, including this one. That averages out to a recession every five years, give or take. (For context, the recovery between the 2008-09 Great Recession and the 2020-21 Even Greater Recession was the longest sustained growth period in our nation’s history.) Recessions are inevitable, we see, but they’re also necessary. The economy grows and then it contracts. Then it grows again and then it contracts. And so on ad infinitum. The economy, then, is like an organ – the lungs, the heart – expanding in order to contract, contracting in order to expand.
The difficulty we experience is not in the performance of the economy, per se; it’s in the effect it has on the job market, a subset of the economy. Even in the mildest, most short-lived recessions, the job market takes some sort of hit or another. Never mind the disaster we’re still suffering!
Numbers don’t always tell the truth, but sometimes they do.
There’s an old saying: figures don’t lie but liars can figure. And over the past few decades, as politics increasingly polluted the public square, everyone and his uncle, it seems, used numbers to advance agendas. So if you look askance at the latest employment numbers, you’re not to be branded a heretic. However, looking at February’s jobs report, not only do the numbers give cause for optimism, so does the exercise of connecting the dots and seeing more than the numbers.
For clarity’s sake, let’s exclude from this analysis any numbers from 2020; they were so grotesque and bizarre, that even the Bureau of Labor Statistics – arguably the world’s foremost congregation of number crunchers – threw their hands in the air, stating in the summer of 2020, “The large employment fluctuations over the past several months, especially in industries with lower-paid workers, complicate the analysis of recent trends...” So with 2020 out of this discussion, let’s do some comparisons to see where the good news is.
It’s even better than it looks.
While some analysts look at February’s gain of 379,000 – the highest monthly total in more than a decade – as a one-time deal, they’re missing something that’s hiding in plain sight. First, had it not been for losses of 69,000 in local and state government and in education, that 379K would have exceeded 450,000. And if not for extreme and prolonged weather conditions nationwide, the loss of 61,000 jobs in construction would have been far fewer, putting the overall job market’s gains, most likely, at more than a half million.
The last time we saw numbers like that? May 2010: short-term census hiring. And before that? April 2000: short-term census hiring. February’s numbers mean something.
A rising tide lifts all ships.
What’s more telling is how widespread the gains were. Except small losses in mining and little change in wholesale trade, transportation and warehousing, information, and financial activities, every other employment sector – leisure and hospitality, professional and business services, health care and social assistance, retail trade, and even manufacturing – posted gains. It may still be difficult for us to test the waters, but if we see all the ships rising, it’s most probably a sign of a rising tide.
Oh, just one more little thing…
All those numbers are merely numbers if taken by themselves, but they’re good indicators of what’s going on when placed in context. There is growing confidence that the economy – and the job market with it – is headed in the right direction, that the pandemic is coming under control, and that increased trade based on improving relations with our allies and trade partners is in the making. All well and good, but there couldn’t be any better time than now for one more little thing: that $1.9 trillion relief package. Confidence is one thing; backing it up is quite another.
There is well-placed reason for optimism. Watch this space.
