March 2017 Employment Situation Summary (040717): 98K Jobs Added, Retail Sector Socked; 4.5 Percent Unemployment Rate; Household Survey Shows 1.38 Million Jobs Added, 1.26 Million Full-Time, in First Quarter; Wage Flatness Continues
Topside Note: Lacking time for a detailed look, I should note that the reported seasonally adjusted results for the Establishment Survey overstate the underlying strength of the raw results by perhaps 40,000 – 50,000 jobs. Readers should recall that February’s original number understated the underlying raw results by at least 150,000 (120,000 in the private sector).
- Yahoo’s Economic Calendar, Markets — 175K jobs added, 4.7 percent unemployment rate
- Yahoo’s Economic Calendar, Briefing.com — 210K jobs added, 4.7 percent unemployment rate
- Associated Press — 180K jobs added, , 4.7 percent unemployment rate.
The report will be here at 8:30. A time crunch kept me from looking at the not seasonally adjusted results before the release, so I’ll catch up shortly after it happens. The full report containing all tables in one place will be here.
HERE IT IS:
The unemployment rate declined to 4.5 percent in March, and total nonfarm payroll employment edged up by 98,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in mining, while retail trade lost jobs.
Household Survey Data
The unemployment rate decreased by 0.2 percentage point to 4.5 percent in March, and the number of unemployed persons declined by 326,000 to 7.2 million. Both measures were down over the year.
Among the major worker groups, the unemployment rates for adult women (4.0 percent), Whites (3.9 percent), and Hispanics (5.1 percent) declined in March. The jobless rates for adult men (4.3 percent), teenagers (13.7 percent), Blacks (8.0 percent), and Asians (3.3 percent) showed little or no change.
… Establishment Survey Data
Total nonfarm payroll employment edged up by 98,000 in March, following gains of 219,000 in February and 216,000 in January. Over the month, employment growth occurred in professional and business services (+56,000) and in mining (+11,000), while retail trade lost jobs (-30,000).
In March, employment in professional and business services rose by 56,000, about in line with the average monthly gain over the prior 12 months. Over the month, job gains occurred in services to buildings and dwellings (+17,000) and in architectural and engineering services (+7,000).
Mining added 11,000 jobs in March, with most of the gain occurring in support activities for mining (+9,000). Mining employment has risen by 35,000 since reaching a recent low in October 2016.
In March, employment continued to trend up in health care (+14,000), with job gains in hospitals (+9,000) and outpatient care centers (+6,000). In the first 3 months of this year, health care added an average of 20,000 jobs per month, compared with an average monthly gain of 32,000 in 2016.
Employment in financial activities continued to trend up in March (+9,000) and has increased by 178,000 over the past 12 months.
Construction employment changed little in March (+6,000), following a gain of 59,000 in February. Employment in construction has been trending up since late last summer, largely among specialty trade contractors and in residential building.
Retail trade lost 30,000 jobs in March. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016.
Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, information, leisure and hospitality, and government, showed little or no change over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in March. In manufacturing, the workweek edged down by 0.2 hour to 40.6 hours, and overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by
0.1 hour to 33.5 hours.
In March, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents to $26.14, following a 7-cent increase in February. Over the year, average hourly earnings have risen by 68 cents, or 2.7 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.90.
The change in total nonfarm payroll employment for January was revised down from +238,000 to +216,000, and the change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January and February combined were 38,000 less than previously reported. Monthly revisions result from additional reports
received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 178,000 per month.
The “recalculation of seasonal factors” phrase makes one wonder how much of the drop is due to that as opposed to “additional reports received from businesses.” If that’s discernible, I’ll let readers know.
Obviously, a month where only 60,000 more people are working than in the previous month isn’t strong, but the unemployment rate drop, depending on its causes, may completely contradict that.
We’ll see. More shortly.
UPDATE: I’m going to look at the published report and tables for now, because the detailed tables aren’t yet available, and BLS site is running very slow (references are to seasonally adjusted figures unless otherwise note) —
- The unemployment rate drop is for the “right” reasons. The civilian labor force expanded by less than one would hope (+145K), but that’s after two previous months totaling over 900K. The big news is that employment increased by 472K (919K in past two months; 1.376 million in first quarter after separating actual January results from population adjustments), and unemployment declined by 326K, both very positive results.
- Black male unemployment increased from 7.8 percent to 8.2 percent, but black female unemployment fell to from 7.1 percent to 6.6 percent, which has to be about the lowest such figure in decades, and maybe ever. Update: Actually, the rate was lower during early and mid-2007, and most of 1999-2001.
- Full-time employment is on an absolute tear. The first quarter figures: March, +476K; Feb., +326K; Jan., +457K; Total first quarter, 1.259 million. This is a very volatile number from month to month, but three strong months in a row should be enough to declare a favorable trend. I don’t think we saw a calendar quarter that strong during the entire Obama era (Update: At 1.446 million, 2nd quarter 2010, the first full quarter after jobs finally began to get recovered after the recession, was the only quarter which was stronger, but that was juiced by Census hiring). A comparison: Full-time employment only increased by 735K during last year’s final three quarters.
- The fully-loaded U-6 unemployment rate is 8.9 percent, though I need to emphasize that it and the main U-3 rate rate still in my view understated because of artificially excluding people who are looking for work, but not hard enough by the government’s definitions, from the workforce.
- On the Establishment Survey front, the goods-producing sector was positive across the board, though less so than one would like to see it: Mining, +11K; Construction, +6K; Manufacturing, +11K.
- The retail sector disaster was in three places: General Merchandise stores (-34.7K), clothing stores (-5.8K), and health and personal care stores (-4.1K). This is a net post-Christmas purge of jobs one suspects aren’t coming back. Update: The unadjusted Feb.-March bloodbath in retail was the worst since 2009. Update 2: To be clear, what happened, when looking at the raw data, is that the February purge was worse than usual (-228K), and the typical post-purge pickup in March barely happened (+10K).
- Actual, not seasonally adjusted non-postal federal employment has dropped by 8,400 in the past two months, perhaps indicating Trump’s hiring freeze is having results. Update: The same two months last year saw an increase of 2,800.
- There’s a serious disconnect between the Household and Establishment Surveys when one looks at Establishment Survey hours worked. With 1.26 million full-time jobs added during the first quarter (and only 120,000 part-time) in the Household Survey, you would think that average weekly hours would have increased by about 0.2 hours. Instead, the figure has fallen by o.1 hours. That said, the average hourly and weekly earnings news continues to be unimpressive, and still would be unimpressive if the work week had increased by as much at the increase in full-time employment would have predicted.
NOT SEASONALLY ADJUSTED RESULTS: February’s Establishment Survey raw numbers for total jobs added overall (+670K) and in the private sector (+593K) were disappointing, and far below benchmarks of 950K and 850K I would have established ahead of time if I had had the time to do so. My preliminary take is that the seasonal adjustments were actually generous, somewhat offsetting February’s understated seasonally adjusted results. That is, the Establishment Survey’s seasonally reported results, as mediocre as they were, overstated the underlying strength of the raw results.
OVERALL, this is a “beauty (or lack of it) is in the eye of the beholder” report. The payrolls jobs and earnings results are disappointing, but the good news in the unemployment rate drop and particularly the sharp increase in first-quarter full-time jobs run counter to that. It seems we’ll have to wait until future reports come out to see which of the two sharply different pictures of the job market is more valid.