February jobs report: the first sign of the economic slowdown spreading to jobs?
February jobs report: the first sign of the economic slowdown spreading to jobs?
- +20,000 jobs added
- U3 unemployment rate -0.2% from 4.0% to 3.8%
- U6 underemployment rate -0.8% from 8.1% to 7.3% (NEW 20 YEAR LOW)
Here are the headlines on wages and the broader measures of underemployment:
Wages and participation rates
- Not in Labor Force, but Want a Job Now: down -32,000 from 5.254 million to 5.222 million
- Part time for economic reasons: down -837,000 from 5.147 million to 4.510 million
- Employment/population ratio ages 25-54: unchanged at 79.9%
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.08 from $23.10 to $23.18, up +3.5% 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.)
- the average manufacturing workweek fell -0.1 hours from 40.8 to 40.7 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs rose +4,000. YoY manufacturing is up 242,000.
- construction jobs declined -31,000. YoY construction jobs are up 373,000.
- temporary jobs rose +5800. YoY these are up +67,000.
- the number of people unemployed for 5 weeks or less fell by -131,000 from 2,325,000 to 2,194,000. The post-recession low was set nine months ago at 2,034,000.
Holding Trump accountable on manufacturing and mining jobs
- Manufacturing jobs rose an average of +12,000/month in the past year vs. the last seven years of Obama’s presidency in which an average of +10,300 manufacturing jobs were added each month.
- Coal mining jobs increased by 100 for an average of +160/month vs. the last seven years of Obama’s presidency in which an average of -300 jobs were lost each month
December was revised upward by +5,000. January was also revised upward by +7,000, for a net change of +12,000.
- Overtime was unchanged at 3.5 hours.
- Professional and business employment (generally higher-paying jobs) rose by +42,000 and is up +537,000 YoY.
- the index of aggregate hours worked for non-managerial workers fell by -0.6%
- the index of aggregate payrolls for non-managerial workers fell by -0.3%
- the alternate jobs number contained in the more volatile household survey increased by +255,000 jobs. This represents an increase of 1,736,000 jobs YoY vs. 2,509,000 in the establishment survey.
- Government jobs fell by -5000.
- the overall employment to population ratio for all ages 16 and up was unchanged at 60.7% m/m and is up 0.3% YoY.
- The labor force participation rate was unchanged at 63.2% and is up +0.2% YoY.
SUMMARY
There are two themes to this report. The first is that it reversed both last month’s establishment and household reports. Last month the first was excellent and the second was poor. This month the establishment survey laid an egg, as featured in the headline number, while the household survey rose smartly, as featured in involuntary part time work, discouraged workers, and both the unemployment and underemployment rates. Positive news also included another good increase in non-supervisory wages.
But this month’s report actually went beyond taking back January’s report. The YoY change in construction, manufacturing, and total jobs for the last two months combined are all lower than they were in December. So we both aggregate hours worked and aggregate payrolls. The manufacturing workweek declined for the second month in a row. It’s also worth noting that the YoY increase in the household report is significantly lagging the establishment report.
In summation, I suspect this month marked the first month in which the economic slowdown showed up in the jobs report.
answering the headline question without going into much detail:
no, it was largely due to unseasonable weather during the survey reference weeks of both January (warm) and February (cold)
check the data for construction, leisure & hospitality and other weather impacted jobs…
I would ignore the U-6, that was a correction from the correction. It looks like the U-series has peaked in the high 3’s and the U-6 in the mid-7’s, jobless claims have leveled off. though I would caution this idea due to the Boomer withdrawal, which is forcing hiring against the employers wishes. Can’t wait for this bug to begin phasing out in the mid-2020’s. Its annoying lol.
10% real decline coming to RE prices. Increasing interest payments on corporate debt. Nevertheless global debt as well. Can a global debt crisis be avoided…………….??????????????????
there may be a reversal of the government shutdown asterisk on the U-6 metric, but it was extraordinary nonetheless…the drop from 8.1% to 7.3% was the largest drop in history for any unemployment metric, and we have to go back to January 2001 to find any U-6 rate that low…
Your point is irrelevant. It overshot due to the surge in part time employment. The lower LFPR means all unemployment rates will be lower. 20 years ago, the U-6 is at 8.3%. A decade ago, 8%.
Ever wonder why postwar U-series was so low during cycles? I am amazed people don’t get that. Its a glitch in the system.
the U6 rate went from 7.6% in November and December to 8.1% in January to 7.3% in February…
those working part time for economic reasons, which is the metric that differentiates U6 from U5, went from 4,781K in November and 4,657K December to 5,147K in January and to 4,310K in February.
throw out the January shutdown aberration, & the drop in those numbers over 4 months is statistically significant and noteworthy…
since unemployment rates indicate the percentage of the labor force that is unemployed or marginal, if your labor force participation rate decreases, those working part time for economic reasons as a percentage of the labor force will go up, not down…