According to the Department of Labor, on April 16th, 2016 the number of initial jobless claims fell to 257,000 people that is the lowest number of first time claims since November of 1973. As the chart outlines below, according to the US census Bureau the US currently has almost 312 million Americans as compared to 211 million Americans in 1973. At that time approximately 122 million Americans were of working age (16 to 64) years of age, of which only 93 million were characterized as working and 1.8 Million receiving continuous unemployment assistance .
|
1973 |
2016 |
|
|
US Census |
211 Million |
312 Million |
|
American of Working Age (16 to 64) |
122 Million |
190 Million |
|
Working Americans |
93 Million |
141 Million |
|
Americans receiving continuous unemployment assistance |
1.8 Million |
2.1 Million |
|
Jobless Rate |
4.8% |
5.0% |
|
Non Farm Payroll growth rate |
3.9% |
2% |
|
Inflation Adjusted Avg. hourly wage |
$21.93 |
$21.73 |
| GDP Growth |
3.83% |
1.4% |
Today, we have 2.1 million Americans receiving continuous unemployment assistance out of 318 million Americans and we have about 141 million Americans in the work force. In 2016 the number of Americans of working age is 190 million so the actual employment rate in 2016 is significantly lower than it was in 1973 because the jobless rate in 1973 was 4.8% whereas now it is 5%.
The nonfarm payroll in 1973 grew 3.9% and 43 years later job growth is 2%. We are not currently in a robust job creating economy. Inflation adjusted average hourly wage was $21.93 in 1973 and today it is less at $21.37. This particular statistic seems to agree with the general sentiment that we have a very large under employed working class along with a highly paid elite.
GDP growth in 1973 was 3.8% which was the month just prior to a recession brought on by the 1973 oil embargo. Shortly thereafter we had waiting lines to buy gasoline and the economy contracted. Today our GDP growth is a rather anemic 1.4% but better than many developed countries and after 8 years from a recession we still have yet to see robust economic growth.
What this means for investors is that the economy is growing but not fast. The equity markets have risen more due to low interest rates than from strong economic growth. With a very uncertain election year, we anticipate continued slow growth in the economy and in the equity markets.
Sources:
http://www.prb.org/pdf08/63.2uslabor.pdf
http://data.bls.gov/timeseries/CES0000000001
