The February Jobs Report was a Tale of Two Data Sets. The March Jobs Report is the Sequel, rebounding from last month’s “weak” Jobs Report
February Jobs Report was either very strong or very week depending upon
whether or not you were looking at the Current Population Survey (CPS)
jobs and unemployment data or if you were looking at the Current
Employment Statistics regarding workers and wages. The headline
seasonally adjusted (SA) non-farm payroll (NFP) data was a
disappointment at only 20,000 SA NFP workers added to the economy. The
non-seasonally adjusted (NSA) CPS data recorded over 1.2 million jobs created. This is why the participation rate rose while the unemployment rate fell last month.
It was expected that we would see roughly 2.00% non-seasonally adjusted worker growth March to March this year.
The March Jobs Report Forecast article examined the recent trend in
data and projected 1.93% to 2.05% NSA annual growth and 0.51% to 0.63%
NSA month to month private sector worker growth. It was also projected
that we would set a 40 year low for the seasonal factor used to convert
the NSA CES data that is recorded to the SA CES data that is reported.
Would it be 30,000 or 100,000 more to the upside? The NSA CES data was
better than February 2014, February 2015, and 2016 while the SA CES was
worse than February 2014, 2015, and 2016.
Warned to Watch the Government math.
It was also thought that we could see a substantial upward revision to
last month’s headline SA NFP data. Remember an upward revision to
February “borrows” growth from March. If we would grow by 275,000
workers during March and we revised February up by 100,000 workers to
120,000 then the 275,000 this month would be reported at 175,000. The
headline would be that the economy is slowing because we didn’t add
All sectors were expected to add seasonally adjusted workers month to month and potentially March to March.
The only sector that looked like it would decline from their March 2018
level was Mining and Logging. Record March weekly wages were
The Headline Non-Farm payroll Worker number was reported at 196,000 workers added to the economy.
Private Sector Workers rose by only 182,000 workers during March. If
you look at the histogram you will see that this is better than what was
reported during March 2017 and March 2018.
The true non-seasonally adjusted Private Sector data grew by 629,000 workers or 1.92%.
This is an improvement from the March 2018 level of 1.81% and up from
the March 2017 level of 1.77%. This does not paint quite the same
picture as the ADP seasonally adjusted growth rate paints. This is the
difference between ADP and CES and the difference between seasonally
adjusted data and reality.
The Seasonal Factor came in at a level comparable to what we have seen during recent years. The
seasonal factor was slightly higher than 2017 and 2018 and slightly
lower than 2015. Last month the seasonal factor skewed the data a little
lower than it should have been reported.
The revisions were intriguing. The January Data was revised lower than last reported and still ended up higher than original reported with the release of the January Jobs Report. This allowed the February number to be reported higher than it was reported in the February Jobs Report.
The Household data on Jobs showed that were recorded a net gain in non-seasonally adjusted jobs. We
saw a loss of 17,000 full-time jobs and a gain of 291,000 jobs. This is
similar to what we experienced during March of 2018. We often see a
gain in moth NSA full-time jobs and NSA part-time jobs. The past two
years we have had extremely strong NSA job creation during February. It
was though that because this February was a little slower than February
2018 (1.2 million jobs versus 1.5 million jobs) that those 300,000 jobs
might have slid into the March data.
Still climbing the Jobs Mountain.
If you take a look at the “Jobs Mountain” histogram at the start of
this article you will see that we have 5.6 million more full-time jobs
than we had during July 2007, the pre-recession peak for combined
full-time and part-time jobs. We have also added 4.087 million part-time
jobs. We saw the loss of 14.442 million full-time jobs between July
2007 and January 2010. We still had fewer FT jobs during January 2017
than we had during July 2007 when President Trump took office.
Full-time jobs are replacing parting time jobs.
We have gone from 126.424 million full-time jobs and 28.453 million
part-time jobs March 2018 to 128.819 million full-time jobs and 27.622
million part-time jobs this March
The seasonally adjusted jobs number came in at a loss of full-time jobs and a gain of part-time jobs.
This means that part of the participation equation, for the seasonally
adjusted data, is a negative. We lost jobs even though we added jobs in
reality. This is the opposite of what we saw last month when we had weak
SA CES worker data and strong CPS jobs data. This month we had
relatively strong SA CES worker data and weak SA CPS jobs data. (The NSA
CPS, SA CPS, and Jobs Mountain Charts can be found here.)
Unemployment Fell to the lowest level for march since March 2001. The
thing to remember here is that we have 156 million total jobs during
March 2019 compared to the 137 million total jobs during March 2001. We
only have 6.382 million unemployed workers compared to the 6.509
million during March of 2001. Translated: We have 127,000 fewer
unemployed workers and 19 million more jobs than we had during March
2001. That is huge.
The Participation rate is approaching 63.00%. Participation matters. If you compare the unemployment rates and the participation rates
we are roughly 4% behind where we were during 1999 through 2001. The
Effective Unemployment Rate, or what this column has coined as the U-7,
is closer to 10% than it is to 4%. This is the reason why we are not
seeing much inflation. There is an economic theory called the Phillips
Curve that says that if you have low unemployment then you have higher
inflation, and conversely if there is high unemployment there is low
inflation. If you compare the same month data with the low unemployment
high participation rates of March 2000 then the U-7 is 9.84%. This is
better than the 13% U-7 rates we saw during March 2010, March 2011,
March 2012, and March 2013.
There is a considerable amount of data that can be examined in more detail than this one article provides. How
did we do with regard to wages and workers? Which sectors grew month to
month and March to March. How did wages grow? How are men and women
performing in this economy. What is happening with the number of
multiple job workers? Are we still seeing younger workers (16-24 years
of age) under-participating and workers 55 years of age an up
“over-participating?” How is President Trump doing after 26 months in
office compared to former Presidents Reagan, Clinton, George W. Bush and
Obama? These articles will be published over the next few days and
It was thought that we would see a spike in
full-time jobs and part-time jobs while also seeing a substantial drop
in unemployed workers. This was expected to boost the participation rate
while cutting the unemployment rate. The question is was whether or
not some hiring that was expected during February get pushed to March?
The headline participation rate dropped slightly because we saw the
workforce population increase by 145,000 potential workers and saw the
overall jobs level drop by 130,000 and the number of unemployed workers
fell by 24,000 workers. The Non-Seasonally adjusted participation rate
was slightly lower this month, dropping from 63.00% to 62.98%. This is
because we saw 243,000 fewer unemployed workers , 17,000 fewer full-time
workers and 291,000 more part-time workers, a net gain of 31,000
participants for 145,000 more potential workers. This was a solid
It’s the Economy.
Categories: It's the Economy