Ok, so here is a really good lesson in statistics. The February unemployment report, which was released on 8, 2013, shows a jump of 236,000 jobs. A huge jump over the from February increase (119K). So, we always have to remember the number can fluctuate by 100K up or down and that the number is constantly revised.
So what looks like a great number is in fact a random jump with no supporting indicators. Naturally, you would expect to see the figure revised downward. Instead, the figure was revised upward in April to 268,000 new jobs. And January was revised up to 148K. What the heck?
Long story short the unemployment rate (7.7%) and the non farm payroll number (236K), are the headline numbers, but they can randomly bounce around a very large amount. You really have to look at the other numbers to get a complete picture.
Unemployment report summary and reaction
Non Farm Payroll jumped by 236,000; a figure that is way above average. There was strong growth in all employment categories except education and state government. The unemployment rate dropped 0.1% to a calculated 7.7%.
The chart below shows the slow decline in the national unemployment rate.
The large increase in payrolls came as unexpected news. The stock market surged on the news. All other unemployment statistics were unchanged.
The national unemployment rate has reached a plateau around 7.8% with little sign of reduction in a slow moving economy. The Employment to Population ratio was measured at 58.6%, the lowest since October 1983. The participation rate was rate 63.5% the lowest since June 1979. Both have barely moved in the past year. The low values point to a huge number of people who have dropped out of the labor force.
Household Survey Results for February
The household data survey reported that the total labor force expanded by 165,000 while the number employed expanded by 170,000.
The black unemployment rate stayed at 13.8%. The reported black labor force decreased by 2000 people and -14,000 less black people said they were working. Black employment was 16,059,000 workers. Black teenage unemployment was 43% versus 22% for whites and 27% for Hispanics. Unemployment rate for Hispanics/Latinos was 9.6% while the rate for whites was 6.8%.
The black unemployment rate has reached a plateau while the national rate continues to decline.
The chart below shows the real black unemployment rate (Black U-6) stuck around 20% even as US national rate slowly declines.
The long-term unemployed (27 weeks or more) was 4.8 million people which represents 40% of the unemployed. The median duration of unemployment was 17.8 weeks while the average duration was 36.9 weeks. People are finding jobs slightly faster.
The “work part-time, wants full-time,” number was 8.0 million. These people are considered under employed and would like additional work. About 2.6 million workers were marginally attached to the labor pool. They have looked for work in the last 12 months but not in the last four weeks. And there were 885K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.
Establishment Survey Results for February
Non-Farm Payrolls rose by 236,000 positions in February. The growth coming in construction, retail trade, business services, and healthcare. Construction was a very strong area of the job growth. Construction added 48,000 jobs while retail trade added +24,000. Government lost -10,000 jobs.
The following chart show the huge jump in private jobs which added 246,000 jobs in February
You can see the wide spread growth across all job categories except for education and state government.
Non-Farm Payroll Revision
Non-farm payrolls were revised in December upward to 219K from 196K and for January 2013 from 157K to 119K. The January revision was the first time we have had a negative revision in 6 months which may indicate a slowing economy.
The average work week was at 34.5 hours and wages added 4 cent in February.
ADP reported an increase in private payrolls of 198,000 positions for February. Small business (1-49 headcount) added 77,000 jobs; medium size (50-499) added 65,000 and large companies (500+) increased workers by 57,000. The breakdown is important because large businesses tend to pay employee more.