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Thursday, April 2, 2015

March 2015 Unemployment Rate, Jobs

Well, the pundits got this one wrong, wrong, wrong.

After months of 200,000+ jobs gains, March was very weak, with the Bureau of Labor Statistics estimating only 126,000 new jobs in total, 129,000 new private sector jobs.  These numbers were half of what the economic pundits expected (see the previews below), and these were the lowest new jobs numbers in months.  We have to go back all the way to December 2013 to find a lower new jobs number.


May 2015 numbers to be released Friday, June 5.
Details HERE.
April 2015 numbers were released Friday, May 8.  Details HERE.  

April: +223,000 jobs, Unemp. Rate down slightly to 5.4%.


So what does this mean?  Perhaps nothing.  An anomaly of one month when dealing with numbers as large as those of the United States jobs market is not unusual.  That's why numbers are considered "preliminary" and are sometimes corrected months after the initial report.  But the booming increases of January and February were also cut back a bit, by about .03%, or 3 hundredths of a percent of the total jobs market, so who knows?  We won't know whether this means anything for at least another month.

We know that initial unemployment claims are at the lowest levels they have been for years, since the early 2000's.  We know that numbers of job openings are high, the highest they have been since the early 2000's.  We also know that the number of unemployed dropped.  It is possible that the less-than-expected increase in the number of jobs may reflect companies having a harder time filling positions in February and into March:  It was colder and people may have stayed out of the winter job market a bit longer than usual.  Remember that job numbers are reported as of the second week of the month, and it takes several weeks to get new hires on board.  So we'll all just have to wait and see.

I'm still crunching numbers here and looking at spreadsheets, so check back over the next week for more graphs, charts, highlights, and updates.

March 2015 Highlights (Specific reports listed below):
  • +126,000 total new payroll jobs; +129,000 new private sector jobs.  These small increases are much lower than the consensus of the "pundits", who estimated that we would add about 245,000 jobs in March.
  • The BLS decreased its January estimates, originally at +257,000 new jobs, again.  They were decreased to +239,000 last month and now down to +201,000 new jobs in January.  The BLS also decreased its February estimates from the initial +295,000 down to +264,000.
  • Unemployment rate stayed the same at 5.5% as the number of unemployed declined.
  • Alternate unemployment rate fell from 11.0% down to 10.9%.  
  • Labor force participation rate decreased .1%.  The number of people in the labor force decreased by 96,000.  The reported number of people employed increased by 34,000, the reported number of people unemployed decreased by 130,000.
  • Number of people working full-time increased by about 190,000 while number of people working part-time decreased by about 170,000.  That's 2,962,000 MORE people working full-time over the past year, since March 2014, and 364,000 FEWER people working part-time over the past year. 
  • The number of involuntary part-time workers (people working part-time because they couldn't find full-time work) increased by 75,000 in March, but it has declined 744,000 over the past year, since March 2014.
  • The number of long-term unemployed (people looking for work over half a year) dropped by 146,000 in March, and has dropped 1,119,000 over the past year, since March 2014.
Since the "trough" of the recession in late 2009/early 2010 in seasonally adjusted numbers:
  • 11.5 million MORE jobs in total
  • 12.1 million MORE private sector jobs
  • 10.3 million MORE people working
  • 10.5 million MORE people working full-time.
  • 178,000 FEWER people working part-time.  
  • (Yes, despite what you may have heard, from the depth of the recession until now, we have many more additional people working full-time vs. part-time jobs. When a recession hits, companies generally cut back on full-time workers first.  When companies start hiring again, the number of full-time workers increases.)
Since Bush left office & Obama took office (January 2009) in seasonally adjusted numbers:
  • 7.2 million MORE jobs in total
  • 7.9 million MORE private sector jobs
  • 6.2 million MORE people working
  • 5.2 million MORE people working full-time
  • 924,000 million MORE people working part-time

March 2015 reports: (Notation on the links will be changed to "UPDATED for MARCH" when the updated reports become available.) 

Preview of Friday's jobs numbers (written Thursday):

"The pundits" expect about 245,000 more jobs when the BLS counts are released tomorrow (Friday) morning at 8:30 a.m., with the unemployment rate remaining the same or adding  .1% back to 5.6%.  If there are many more jobs but the unemployment rate stays the same or goes up a tenth, this would be a good indication that more people have entered the labor force in March.     
  • The ADP private payroller report came out yesterday which estimated an additional 189,000 private sector jobs in March.  Estimates for February were raised slightly, but estimates for January were decreased.  According to ADP's estimates, this was the first month in 14 months that the US has added fewer than 200,000 private sector jobs.  (ADP has tended to underestimate private job growth when the report is released, and initial estimates have been revised upwards 9 out of the past 12 months.)
    Comments from ADP:  
    "March job gains came in under 200,000 for the first time since January of last year,” said Carlos Rodriguez, president and chief executive officer of ADP. “The decline was centered in the largest companies, those with 1000 or more employees.” Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market. Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack.” 
  • "Economists polled by Reuters are forecasting a healthy 244,000 rise in non-farm payrolls in March. If confirmed, it would be the 13th straight month of job gains of over 200,000, matching a run in 1994-95.  In the post-war period only the runs of 14 months in 1976-77 and 15 in 1983-84 have been higher.

    Yellen (Federal Reserve Chair) said a significant pickup in core inflation was not a precondition for the Fed to pull the trigger on rates. Nevertheless, inflation remains stubbornly low, although consumer prices did rebound in February as the cost of gasoline rose.
    For many economists the focus on Friday is less the jobs figures than average earnings, which are seen picking up after a muted 3 cent per hour rise in February. 
    A spate of weak U.S. economic data at the start of the year, from retail sales to business spending, has prompted economists to scale down their growth views and push back to September their expectations of a first rate hike since 2006."
  • The ISM (Institute of Supply Management)  "The (March) Employment Index registered 50 percent, 1.4 percentage points below the February reading of 51.4 percent, reflecting unchanged (manufacturing) employment levels from February."
  • Bloomberg writes:  "Focus is on tomorrow’s monthly payrolls data, in which economists predict nonfarm payrolls rose 245,000 in March, down from February’s 295,000 with no change to the 5.5 percent unemployment rate, the lowest since 2008. Wage growth is also forecast to be little changed."
  • The Consumer Confidence Index of the Conference Board  jumped in March:  " The Index now stands at 101.3 (1985=100), up from 98.8 in February. The Expectations Index increased from 90.0 last month to 96.0 in March. The Present Situation Index, however, decreased from 112.1 in February to 109.1."
  • The Consumer Sentiment index for March compiled by the University of Michigan  decreased to 93 from the February reading of 95.4.  The Michigan people put the report into perspective:  "Consumer optimism reached a ten-year peak of 95.5 in the 1st quarter of 2015:  Its highest level since the 3rd quarter of 2004. The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Importantly, most of the recent variation was among lower income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours. Households with incomes in the middle and top thirds of the distribution, in contrast, recorded gains in confidence in the March survey. Expanding job opportunities as well as more favorable wage gains have meant that consumer spending will rebound during the balance of the year. While there is a widespread expectation that interest rates will begin to rise later in the year, few consumers anticipated that the size of the increases will dampen their credit sensitive purchase plans."
  • "The Rasmussen Employment Index  which measures worker confidence has either not been released for March or is no longer available without a subscription.  In February it "rose a point to tie the highest level measured in six years.  At 104.2, worker confidence is up from 103.3 in January and matches December’s all-time high."  So.. no useful information from the conservative-leaning Rasmussen. 
  • Job search engine was somewhat higher than the other estimates.  Linkup projected a net gain of 275,000 jobs in March.  (They base their projections largely on job openings.) 
  • Presumably  in response to ADP data and to other lower estimates Market Watch just posted an article entitled "Four Reasons why the March jobs report may not change minds". The "minds" the article talks about are people on Wall Street and other business people who feel that the economy is doing well and growth is strong.  The article talks about the "sizzling" growth of 295,000 new jobs in February vs. lower estimates of 243,000 new jobs for March.  The article talks about low numbers of unemployment claims as well as raises for the lowest paid workers by comanies such as Target and Walmart. 
  • Finally, the number of Americans filing new claims for unemployment benefits has again started to head down, which may well mean higher job numbers than forecasted.  In February, the "pundits" were concerned because the number of new claims had risen a bit "to its highest level since May, which could raise concerns about some weakness in the labor market."  according to MSN Money.  But as February headed into March, the number of new claims started to decline.  As you can see on the chart below, last week's claims were among the lowest.. since approximately 2000.

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