A Weaker Jobs Market

BLS reports the February Employment Situation:

Nonfarm payroll employment edged down in February (-63,000), and the unemployment rate was essentially unchanged at 4.8 percent

Well – the unemployment rate dropped from 4.9% to 4.8% despite the fact that the household survey indicted a 255 thousand decline in employment. CalculatedRisk summarized the situation thusly:

Although unemployment was slightly lower – as people leave the workforce – the rise in unemployment, from a cycle low of 4.4% to 4.8% is a recession warning. Also concerning is the YoY change in employment is less than 1%, also suggesting a recession. Overall this is a weak report

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To be more specific, the labor force participation rate fell from 66.1% to 65.9% so the unemployment rate dipped despite the fact that the employment-population ratio fell from 62.9% to 62.7%. Our graph shows this ratio over the past 120 months and the current job market picture is certainly weak as compared to either 2000 or even December 2006.