- March ISM Manufacturing — 53.7%, up from 53.2% in February
- March ISM Non-Manufacturing — 53.1%, up from 51.6% in February
- March Auto sales — 5.7 percent increase; first quarter sales are only up 1.4% over the first quarter of 2013.
- March ADP Private-sector Job Adds — 191,000
- Week ended March 30 Initial Unemployment Claims — 326,00 seasonally adjusted claims; raw claims were up 5.6 percent from the previous week.
- Mark Zandi of Moody’s in the ADP conference call on Wednesday predicted 185,000 seasonally adjusted job additions, and a possible slight drop in the unemployment rate to 6.6 percent from February’s 6.7 percent.
- The Associated Press cited a prediction of 191,000 job adds by FactSet in its report on unemployment claims yesterday.
- Bloomberg predicts 200,000 jobs added, and also didn’t carry an unemployment rate prediction.
Looking at the raw (not seasonally adjusted) data:
As seen above, last month’s seasonal adjustments vastly overstated the real (not seasonally adjusted) situation. February’s job growth, both overall and in the private sector, was worse than every February since 2010, which was the final month the economy lost jobs.
The economy needs to have added 1 million jobs overall and 950,00 in the private sector before seasonal adjustementto make meaningful progress in overcoming the six-year general job malaise and to validate the press’s insistence that things would get much better when the weather improved.
We’ll see what happens here at 8:30.
HERE IT IS (permanent link to full HTML) — Immediate read is disappointment, pending a closer look:
Total nonfarm payroll employment rose by 192,000 in March, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in professional and business services, in health care, and in mining and logging.
Household Survey Data
In March, the number of unemployed persons was essentially unchanged at 10.5 million, and the unemployment rate held at 6.7 percent. Both measures have shown little movement since December 2013. Over the year, the number of unemployed persons and the unemployment rate were down by 1.2 million and 0.8 percentage point, respectively.
Among the major worker groups, the unemployment rate for adult women increased to 6.2 percent in March, and the rate for adult men decreased to 6.2 percent. The rates for teenagers (20.9 percent), whites (5.8 percent), blacks (12.4 percent), and Hispanics (7.9 percent) showed little or no change. The jobless rate for Asians was 5.4 percent (not seasonally adjusted), little changed from a year earlier.
The number of long-term unemployed (those jobless for 27 weeks or more), at 3.7 million, changed little in March; these individuals accounted for 35.8 percent of the unemployed. The number of long-term unemployed was down by 837,000 over the year.
Both the civilian labor force and total employment increased in March. The labor force participation rate (63.2 percent) and the employment-population ratio (58.9 percent) changed little over the month. …
… Establishment Survey Data
Total nonfarm payroll employment rose by 192,000 in March. Job growth averaged 183,000 per month over the prior 12 months. In March, employment grew in professional and business services, in health care, and in mining and logging.
Professional and business services added 57,000 jobs in March, in line with its average monthly gain of 56,000 over the prior 12 months. Within the industry, employment increased in March in temporary help services (+29,000), in computer systems design and related services (+6,000), and in architectural and engineering services (+5,000).
In March, health care added 19,000 jobs. …
Employment in mining and logging rose in March (+7,000), with the bulk of the increase
occurring in support activities for mining (+5,000). Over the prior 12 months, the mining
and logging industry added an average of 3,000 jobs per month.
Employment continued to trend up in March in food services and drinking places (+30,000). Over the past year, food services and drinking places has added 323,000 jobs.
Construction employment continued to trend up in March (+19,000). Over the past year, construction employment has risen by 151,000.
Employment in government was unchanged in March.
Employment in other major industries, including manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and financial activities, changed little over the month.
The average workweek for all employees on private nonfarm payrolls increased by 0.2 hour in March to 34.5 hours, offsetting a net decline over the prior 3 months. …
In March, average hourly earnings for all employees on private nonfarm payrolls edged down by 1 cent to $24.30, following a 9 cent increase in February. …
The change in total nonfarm payroll employment for January was revised from +129,000 to +144,000, and the change for February was revised from +175,000 to +197,000. With these revisions, employment gains in January and February were 37,000 higher than previously reported.
The raw numbers vs. the benchmarks:
- Total nonfarm payroll: Benchmark was 1 million; Actual came in at 941,000. That’s the best March since before the recession.
- Private sector: Benchmark was 950,000; Actual came in at 831,000, also the best since before the recession.
Those numbers are a lot closer to the benchmarks than today’s seasonally adjusted figures would lead you to believe. They qualify as “short of goal, but far from awful.”
But there are some bizarre elements to this:
Based on comparisons to previous years, total nonfarm adds might have been expected to come in at about 250K -275K. But they didn’t. (It will be interesting to see if anyone in the press, which almost always ignores the raw numbers, points this out.)
The private sector’s seasonal adjustment also looks understated, but not by as much. It seems like 240K-250K would have been more reasonable.
Now look at February. Somehow, total nonfarm job adds went down but the seasonally adjusted number, which as I noted last month vastly overstated the month’s awful raw result, went up even further.
At this point, anyone pretending to be unconvinced that looking at the raw numbers is critical is really saying they just doesn’t want to do the work involved in actual analysis.
- The distance between black and white unemployment is a huge 6.6 points (12.4% vs. 5.8%).
- Labor force participation ticked up by 0.2%. Hopefully, that’s the start of a trend.
- Household survey employment increased by 486,000, and is up by 1.156 million in the past three months.
- Seasonally adjusted full-time employment increased by 184K, while part-time employment went up by 365K. Full-time employment is still over 3.8 million below the pre-recession peak achieved almost 6-1/2 years ago.
- On the Establishment Survey side, 56,000 of the 389,000 net seasonally adjusted jobs added in February and March, or over 14%, went to temps, a segment which makes up about 2% of the workforce. Temp adds had been running at about 10% of all job growth since employment began to pick up in early 2010.
- Leisure and hospitality jobs are also growing at a disproportionate rate.
Overall: Though not awful in some respects (see Updates, as it is awful in some), this report is not the “spring renaissance” some hopeful pundits and forecasters had been predicting.
UPDATE: Zero Hedge — “Number Of High-Wage Jobs Added In March: +2,000.” The case is a little overblown (e.g., claiming that health care is a completely low-paying sector is way over the top), but the post still makes some good points.
UPDATE 2: Also at Zero Hedge — “Rising Temps.”
UPDATE 3: CNN Money notes that the number of private sector jobs is finally back to and slightly above its January 2008 pre-recession peak. That’s fine, but as reporter Annalynn Kurtz noted:
So why doesn’t it feel like a recovery?
Given it took four years to get this point, this jobs recovery has been the slowest on record since the Labor Department started tracking the data in 1939.
The private sector data also misses an important piece of the puzzle: It does not factor in the growing population.
For that reason, Heidi Shierholz, a labor economist with the liberal-leaning Economic Policy Institute, calls the private sector jobs number little more than a “psychological milestone.”
… According to Shierholz’s calculations, the U.S. economy still needs at least 5 million jobs to get back to a healthy pre-recession labor market, when the unemployment rate was below 5.5%.
At the current rate of job growth, that could still take five years.
Until then, she’s not ready to call it a full recovery.
Neither am I.
Nor should anyone else.
UPDATE 4: Pethokoukis: “Perhaps, one could say, we’ve even returned to normal. If so, it’s a dreary new normal.”