- by New Deal democrat
My focus for this report continued to be whether the leading sectors and other indicators continued to decline, and whether the pace of growth continued to decelerate.
While the deceleration in growth did occur - and substantially so - the leading sectors were decidedly mixed, with some - notably the unemployment and underemployment rates - actually improving.
Here’s my in depth synopsis.
HEADLINES:
- 253,000 jobs added. Private sector jobs increased 230,000. Government jobs increased by 23,000.
- BUT, February was revised down by -78,000, and March by -71,000, for a total of -149,000. At +165,000, March is now the lowest reading since December 2020, and the three month moving average of growth declined by over -100,000 from 345,000 before revisions to 222,000, again the lowest since the end of 2020.
- The alternate, and more volatile measure in the household report rose by 139,000 jobs.
- Despite this, the U3 unemployment rate declined -0.1% to 3.4%. This is because the civilian labor force, the denominator in the figure, declined by -43,000
- U6 underemployment rate also declined -0.1% to 6.6%.
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and help us gauge how much the post-pandemic employment boom is shading towards a downturn. These were decidedly mixed:
- the average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, was unchanged at 40.6, down -1.0 hours from February peak last year of 41.6 hours.
- Manufacturing jobs increased by 11,000.
- Construction jobs increased by 15,000.
- Residential construction jobs, which are even more leading, declilned by 1,800. It appears likely that January was the peak for this sector.
- Temporary jobs, which have generally been declining late last year, declined further, and sharply, by -23,500.
- the number of people unemployed for 5 weeks or less declined -436,000 to 1,866,000.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel increased $.11, or +0.5%, to $28.62, a YoY gain of 5.0%, the lowest YoY gain since June of 2021.
Aggregate hours and wages:
- the index of aggregate hours worked for non-managerial workers declined -0.2%.
- the index of aggregate payrolls for non-managerial workers rose 0.3%, but continued its deceleration to 6.7% YoY, the lowest since March 2021, although still 1.7% higher YoY than inflation as of the last reading.
Other significant data:
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose 31,000, -402,000, or -2.4% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments added 26,800 jobs, and are now only -87,100, or -0.7% below their pre-pandemic peak.
- Professional and business employment rose 43,000. This series has also been decelerating, and is now up 2.3% YoY.
- The Labor Force Participation Rate was unchanged at 62.6%, vs. 63.4% in February 2020.
- The number of job holders who were part time for economic reasons declined -199,000.
- Those not in the labor force at all, but who want a job now, increased 346,000 to 5.271 million vs. its best level of 4.761 shortly before the pandemic.
SUMMARY
This was a very mixed report. The biggest positives were the increases in manufacturing and construction jobs. Nominal wage growth, while decelerating, continues to be strong. And both the unemployment and underemployment rates tied their multi-decade lows.
The negatives included the reasons *why* the unemployment and underemployment rates were so low: the labor force itself declined, while those who weren’t in the labor force but want a job increased. Temporary jobs and residential construction jobs continued to decline, the former sharply. And perhaps most important of all: for the second month in a row, we have had sharp downward revisions to the previous two months’ numbers. This is something that tends to happen as a recession is about to start, or has already started.
The theme remains deceleration, but no downturn yet.
