Friday, April 2, 2010

NFP +162,000

From the BLS:

Nonfarm payroll employment increased by 162,000 in March, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Temporary help services and health care continued to add jobs over the month.
Employment in federal government also rose, reflecting the hiring of temporary
workers for Census 2010. Employment continued to decline in financial activi-
ties and in information.

First, let's remember there are two surveys -- the household and the establishment. The household provides information for the unemployment rate. So, let's start there.

It appears the unemployment rate has topped out in the 9.5%-10% range. While we're not seeing any downward momentum, we aren't seeing anymore strong upside moves either.

Also note the unemployment rate continues to be high for those with low educational achievement and low for those with high educational achievement:

Unemployment rate for

Less than a high school diploma: 14.5%
High school with no college: 10.8%
Some college or associates degree: 8.2%
Bachelor's or higher: 4.9% (this is near full employment from an economic perspective).

The civilian labor force increased by 398,000. This is a very important number because it is the denominator in the unemployment calculation. Last month we also saw an increase of 134,000 in overall unemployment. That means the unemployment rate remained stable at 9.7%.

The participation rate increased .1%, indicating more people are moving back into the civilian labor force.

Those "not in the labor force" decreased 238,000.

Those who were unemployed between 0 and 26 weeks decreased as well. The only time category that increased was the 27+ weeks unemployed.

Those working part time for economic reasons increased 263,000.

The establishment survey was solid. First, total private hiring was 123,000 -- meaning the "census workers tilted the numbers" argument is wrong. Secondly, goods producing jobs increased 41,000. This sector of the economy has been a drag on growth for the last few months. In addition, construction and manufacturing jobs account for the vast majority (over 70%) of all job losses during the recession. So an increase is welcome.

In addition, service jobs also saw an increase 82,000, with only two service sector areas (financial services and information technology) showing decreases.

While average hourly earnings decreased (largely because of labor market slack) weekly hours increased by .1 meaning weekly earnings increased from $762.41 to $763.98. The index of aggregate weekly hours increased from 91 to 91.4

Overall, this is a solid report.

Let me add this caveat. On August 22, 2009, I wrote the following:

Now -- that leads to the final question: when will the jobs come back? In order for that to happen we need to see at least one quarter of a positive GDP and probably two. That means the soonest we can expect a drop in the unemployment rate would be the a few months from now and that is only under the rosiest of scenarios. The most likely possibility is it won't be until the end of the first quarter of next year before we start to see a ticking down (and that assumes a stronger rate of growth than I think is going to happen).