Mark Thoma of the University of Oregon tries to put the January 6, 2006 Employment Report in perspective:
Economist's View: And Never is Heard a Discouraging Word?: The Labor Department reported today that employment increased by 108,000 over November, a number that is lower than expected, and the unemployment rate held steady at 4.9%. This is a brief follow-up to PGL's post at Angry Bear on the unemployment, labor force participation, and discouraged worker numbers (Kash has more). A sign of an improving labor market is a fall in discouraged workers. However, report from the BLS:
Persons Not in the Labor Force (Household Survey Data): The number of persons marginally attached to the labor force was 1.6 million in December, about the same as a year earlier. (Data are not seasonally adjusted.) These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. Among the marginally attached, there were 451,000 discouraged workers in December, essentially the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.1 million marginally attached persons had not searched for work for reasons such as school attendance or family responsibilities. (See table A-13.)
It's puzzling why the number of marginally attached discouraged workers isn't falling if the labor market is strengthening. The news is a bit better relative to a year ago for part-time workers wanting to work full-time:
Total Employment and the Labor Force (Household Survey Data): Total employment, at 142.8 million in December, was little changed over the month but was 2.6 million higher than a year earlier. The employment-population ratio held at 62.8 percent in December, 0.4 percentage point higher than a year earlier. The labor force participation rate, at 66.0 percent, was unchanged over the year. (See table A-1.)
The number of persons who work part time for economic reasons, at 4.1 million, was about unchanged in December but was down by 327,000 over the year. This category includes persons who indicated that they would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs. (See table A-5.)
See PGL's post for a look at these figures over a longer time period. With both employment and real income behaving sluggishly by historical standards, the labor market is not as robust as would be expected in a recovery.