U.S. Private Sector Job Quality Index (JQI)® February 2020

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U.S. Private Sector Job Quality Index Revised to 79.41 from Previous Month - Reflecting a Slightly Higher Proportion of U.S. Production and Non-Supervisory Jobs.

"The JQI is still near its March 2012 low, having retraced almost all of its improvement form 2012 through 2016, and last year’s jobs formation – especially in the second half – was too highly concentrated in low-wage, low-hour jobs.”

Following the release of the Employment Situation Report for February 2020 by the U.S. Bureau of Labor Statistics (BLS), and reflecting the annual revisions to the national estimates of employment, hours, and earnings from the Current Employment Statistics (CES) monthly survey of nonfarm establishments, released by the BLS last month, the U.S. Private Sector Job Quality Index (JQI)® has been revised to a level of 79.41, down by -0.13% from its revised level one month earlier and reflecting a slightly higher proportion - relative to the prior month - of U.S. production and non-supervisory (P&NS) jobs paying less than the mean weekly income of all P&NS jobs, relative to those jobs paying above such mean. Although the JQI remains near its March 2012 low level of 78.56 (having retraced most of its gains from 2012 through 2016) the downward move in the index should be evaluated in the context of upward revisions to the prior month’s reading. The mean weekly wage income of all P&NS jobs as of the current reading (which reflects the level as of January 2020) was $801.47, a change of +0.41% from its revised level the month prior.

The JQ-Instant™ preliminary read of the 228,000 increase in all private sector, non-farm payrolls in February 2020 shows that approximately 42.15% of the change in such private sector jobs was in industry sectors offering P&NS jobs with an average weekly income below the mean weekly income of all P&NS jobs (i.e. “Low Quality Jobs”). The JQ-Instant read shows a welcome improvement over the second half of 2019 and January 2020, during which Low Quality Job formation stood at well over 50% on average. The source of the improvement was rooted in a 61,000 boost in goods producing jobs in February. This increase would indicate an improvement to the overall JQI next month.

Daniel Alpert, co-creator of the U.S. Private Sector Job Quality Index, said, “Following the BLS annual benchmark revisions to the Current Employment Statistics last month, which turned the JQI downward, as a result of there being materially fewer high-quality jobs formed in 2019 than was previously thought, today’s strong jobs report – and the JQ-Instant value resulting therefrom – presages some improvement to the overall JQI next month. Having said that, the JQI is still near its March 2012 low, having retraced almost all of its improvement form 2012 through 2016, and last year’s jobs formation – especially in the second half – was too highly concentrated in low-wage, low-hour jobs.”

An explanatory video on the JQI, please see: http://www.vimeo.com/jqi.

This news release presents data from the most recent JQI reading calculated through the month immediately prior to the month covered by this release. The JQI assesses job quality in the United States by measuring desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. The JQI offers a near-real time analytical tool to policymakers, researchers and financial market participants with relevance to a variety of trends in the economy at large. The JQI analyzes a representative sample of the economy using production and non-supervisory job (P&NS) data from 180 different industry groups spanning across all 20 super-sectors into which the BLS groups establishments. The principal data utilized is contained in the Current Employment Survey (CES, also often referred to as the establishment survey) P&NS data on average weekly hours, average hourly wage and total employment for each given industry group (seasonally adjusted, in all cases). The JQI is updated on a monthly basis contemporaneously with the release of new CES data from the BLS.

The JQ-Instant reading is for the month covered by this release and has implications for the likely direction of the JQI itself in future months. As the JQI is reported as a three-month rolling average of actual monthly readings, significant imbalances (readings varying from an even distribution between high and low quality jobs) in the JQ-Instant results would suggest future JQI readings moving in the direction of the dominant side of such distribution.

The U.S. Private Sector Job Quality Index (patent pending) is a joint development of the Program on the Law and Regulation of Financial Institutions and Markets at the Jack G. Clarke Institute of Cornell Law School, the University of Missouri Kansas City Department of Economics, the Coalition for a Prosperous America, and the Global Institute for Sustainable Prosperity.

For more information, and to read the full report, visit https://www.jobqualityindex.com/.

©2020 JQI IP Holdings LLC.] “Private Sector Job Quality Index” and “JQI” are registered trademarks of JQI IP Holdings LLC. The Private Sector Job Quality Index is patent pending, application number US 62/900,923. Cornell logo and Cornell Law School and Jack G. Clarke Program names and references used with permission.

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Elise Perkins
Rally Point Media Strategies
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