March jobs report: participation up, unemployment down, wage growth miserly

by New Deal democrat

March jobs report: participation up, unemployment down, wage growth miserly

HEADLINES:

  • +98,000 jobs added
  • U3 unemployment rate down 0.2% from 4.7% to 4.5%
  • U6 underemployment rate down 0.3% from 9.2% to 8.9%

Here are the headlines on wages and the chronic heightened underemployment:

Wages and participation rates

  • Not in Labor Force, but Want a Job Now:  up +284,000 from 5.597 million to 5.781 million
  • Part time for economic reasons: down -151,000 from 5.704 million to 5.553 million
  • Employment/population ratio ages 25-54: up +0.2% from 78.3% to 78.5%
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.04 from $21.86 to $21.90,  up +2.3% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)

January was revised downward by -22,000. February was also revised downward by -16,000, for a net change of -38,000.

NOTE: Beginning next month, I will begin keeping track in the headlines of both manufacturing and mining job growth.  Better news in these numbers was a central part of Trump’s campaign, and after a 3 month grace period, I think it is fair to begin to see how well – or poorly – he is keeping that promise.


The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were positive with one exception.

  • the average manufacturing workweek was fell from 40.8 hours to 40.6 hours.  This is one of the 10 components of the LEI.
  • construction jobs increased by +6,000. YoY construction jobs are up +177,000.
  • manufacturing jobs increased by +11,000, and after being down YoY for a year, in the last two months have now turned up.
  • temporary jobs increased by 10,500.
  • the number of people unemployed for 5 weeks or less decreased by -232,000 from 2,566,000 to 2,324,000.  The post-recession low was set nearly 18 months ago at 2,095,000.

Other important coincident indicators help  us paint a more complete picture of the present:

  • Overtime fell 0.1 from 3.3 to 3.2 hours.
  • Professional and business employment (generally higher- paying jobs) increased by +56,000 and are up +639,000 YoY.
  • the index of aggregate hours worked in the economy rose by 0.1 from 106.3 to 106.4
  • the index of aggregate payrolls rose by 0.3 from 132.6 to 132.9.

Other news included:

  • the alternate jobs number contained  in the more volatile household survey increased by   +472,000 jobs.  This represents an increase of 1,699,000  jobs YoY vs. 2,185,000 in the establishment survey.
  • Government jobs rose by +9,000.
  • the overall employment  to  population ratio for all ages 16 and up rose +0.1% from  60.0% to 60.1 m/m  and is up +0.2% YoY.
  • The  labor force participation rate was unchanged month m/m and YoY at 63.0%.

SUMMARY

While the headline for most summaries of this report will probably be the miss in the headline jobs number, the deeper trends appear to be a continuation of what we have seen for the last few months:  significant declines in both the unemployment and underemployment rates, a continuing sharp increase in labor force participation (the biggest in nearly 30 years), but continuing wage growth stagnation. These trends are probably linked. The big move from people off the sidelines into the labor market is probably helping keep a lid on wage growth.

The only other negatives in the report is the stubborn high number of people outside of the labor force who want a job now, and the decline in the manufacturing workweek and overtime.

All in all, this was a quite positive late cycle jobs report, as the YoY% gain in jobs continues to decelerate, but remain positive.

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