March job reports

[Big girl]

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[BS Wildcats]

Where were your posts on Obama's numbers?  That's right, you give him a pass on everything.

[stevenash]

Don't get bent out of shape by weak payroll growth in March. Although payrolls grew only 98,000, well below consensus expectations and below even the most pessimistic forecast by any economics group, this is not the start of a new weaker trend. The soft March reading comes after two relatively strong months in January and February. Putting the three months together, payrolls grew an average of 178,000 in the first quarter, almost exactly the average of 182,000 in the past year. In other words, March was payback for an unusually strong January/February. Meanwhile, civilian employment, an alternative measure of jobs that includes small-business start-ups, increased 472,000 in March and is up 178,000 per month over the past year. That suggests the underlying trend for job growth is still right around 180,000 per month. Due to the March surge in civilian employment the unemployment rate fell to 4.5%, the lowest since May 2007 and clearly below the Fed's long-run forecast of 4.8%. Although some claim the jobless rate is only falling due to a shrinking labor force (people who are either working or looking for work), the facts disagree. Since May 2007, the last time the jobless rate was this low, the labor force is up 8.8 million. The labor force is also up 1.4 million in the past year. The participation rate remains low by the standard of the past 40 years, but it's no longer consistently declining. At 63.0% it remains tied for the highest level in almost three years.. Wages per hour are up 2.7% in the past year while total hours worked are up 1.4%. As a result, total wages are up 4.1% from a year ago, and this excludes fringe benefits and irregular bonuses/commissions. The bottom line is that the labor market is doing fine. If we could just get some better policies in place, like tax cuts, health care reform, and changes to the disability system and student aid, it would be doing even better.

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[Big girl]

19 minutes ago, stevenash said:

Don't get bent out of shape by weak payroll growth in March. Although payrolls grew only 98,000, well below consensus expectations and below even the most pessimistic forecast by any economics group, this is not the start of a new weaker trend. The soft March reading comes after two relatively strong months in January and February. Putting the three months together, payrolls grew an average of 178,000 in the first quarter, almost exactly the average of 182,000 in the past year. In other words, March was payback for an unusually strong January/February. Meanwhile, civilian employment, an alternative measure of jobs that includes small-business start-ups, increased 472,000 in March and is up 178,000 per month over the past year. That suggests the underlying trend for job growth is still right around 180,000 per month. Due to the March surge in civilian employment the unemployment rate fell to 4.5%, the lowest since May 2007 and clearly below the Fed's long-run forecast of 4.8%. Although some claim the jobless rate is only falling due to a shrinking labor force (people who are either working or looking for work), the facts disagree. Since May 2007, the last time the jobless rate was this low, the labor force is up 8.8 million. The labor force is also up 1.4 million in the past year. The participation rate remains low by the standard of the past 40 years, but it's no longer consistently declining. At 63.0% it remains tied for the highest level in almost three years.. Wages per hour are up 2.7% in the past year while total hours worked are up 1.4%. As a result, total wages are up 4.1% from a year ago, and this excludes fringe benefits and irregular bonuses/commissions. The bottom line is that the labor market is doing fine. If we could just get some better policies in place, like tax cuts, health care reform, and changes to the disability system and student aid, it would be doing even better.

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I thought you guys said all of the reports were incorrect during Obama's tenure. Nash, do you beleive them now?

[stevenash]

I NEVER said the jobs reports were incorrect.   Show me where I said that.   My main complaint was(as I have stated umpteen times) that GDP( which is well known to be the best barometer of the state of the economy) was running at about half of what the average post recession recovery rate.  Yes, Big Girl, the average GDP recession recovery rate runs in the 3.5% to 4% area and during the 8 Obama years, the GDP never got over 2%.  So I "beleive" them now, just as I "beleived" them then.  Nice try.

 

 

The best way to understand Friday’s employment report is to ignore the jobs number, which was lousy, and the unemployment rate, which looked good. Instead, looking at why the two figures diverged gives comfort that the jobs market remains strong.

Friday’s employment report presented a somewhat confusing

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. On the one hand, it showed that the economy added just 98,000 jobs last month—short of the 175,000 economists were looking for and well off the previous two months’ pace. On the other hand, the unemployment fell to 4.5% from 4.7%, dipping to its lowest level in nearly a decade. And in another sign of labor market tightness, average hourly earnings were up 2.7% from a year earlier.

 

The jobs number comes from a survey of businesses and government agencies, while the unemployment rate is from a survey of households, so an occasional mixed signal between the two numbers is inevitable. The weather probably played a role last month: A winter storm hit

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, and people who missed a paycheck that week weren’t counted as employed in the business survey. But people who miss work because of the weather still get counted as employed in the household survey.

The differences between the two surveys also may help settle the question of whether the job market is as tight as the unemployment rate suggests. During periods of strong employment such as the late 1990s and early 2000s, the employer survey registered far more jobs than the household survey. During the last recession, the opposite was true.

Created with Highcharts 5.0.10Slack LineDifference between employer and adjusted household-survey employment, 12-monthrolling averageTHE WALL STREET JOURNALSource: Labor Department