Monday, May 27, 2013

March Monthly Unemployment Review: A disappointing 88,000 new jobs in March

BLS Unemployment Report Review for March

The BLS reported that only 88,000 net new jobs were created in March. which is well below the expected 150,000 average.  The national unemployment rate did not move from 7.6%. The black rate was 13.3%.  Most of the job growth was in temporary help, healthcare and leisure and hospitality. Retail sales employment was down by 25K jobs.

Overall unemployment report summary and reaction

The big story is the 663,000 people who dropped out of the labor force as reported in the household survey.   The drop outs were spread across all demographics categories. The stock market shrugged of the small job increase number and rose slightly.  The chart below shows the slow decline in the national unemployment rate.

Almost every other unemployment statistics were unchanged.

The national unemployment rate dropped 0.1% to 7.6% consistent with the slow growing economy. The Employment to Population ratio dropped to 58.5% and the participation rate was rate 63.3%. Both dropped during the month to record lows.  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 decreased by -496,000 and the number employed dropped by -206,000.  All demographic categories, white, blacks and Hispanic, saw large number of people who self-classified as not in the labor force. 

The black unemployment rate moved down to 13.3%.  The reported black labor force decreased by -115,000 people however 9,000 more black people said they were working.  About 148,000 additional black people said they were not in the labor force. Changes in labor force statistics do not always match.

Total black employment was estimated at 16,068,000 workers.  Black teenage unemployment was 34% versus 23% for whites and 28% for Hispanics. Unemployment rate for Hispanics/Latinos was 9.2% while the rate for whites was 6.7%.

The black unemployment rate has reached a plateau while the national rate continues to decline.

The real black unemployment rate (Black U-6) is stuck around 20% even as US national rate slowly declines.

The long-term unemployed (27 weeks or more) was 4.6 million people which represents 40% of the unemployed.  The median duration of unemployment was 18.1  weeks  while the average duration was 37.1 weeks.  People are taking longer to find jobs.

The “work part-time, wants full-time,” number decrease by about 350,000 people to 7.6 million.  These people are considered under employed and would like additional work.  About 2.3 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 803K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

Establishment Survey Results for March

Non-Farm Payrolls rose by only 88,000 jobs in March. The growth came in construction, healthcare, hospitality and temporary help. Retail trade lost 25,000 spots.  Construction was a strong area of the job growth adding 18,000 people to the workforce. The number would have been higher except for a 9000 job reduction in civil engineering category.  Government shrank again losing -7,000 jobs. 

Here is a chart of the changes in Non Farm Payrolls since the start of the recession in 2007.

The following charts show the small change in Non Farm Payrolls in March.

The following chart show tepid growth in all categories. Business Services was pumped up by temporary help increases of 20,000 jobs. One would suspect the some of those works are not real temps but permatemps who have been outsourced.

Non-Farm Payroll Revision

Non-farm payrolls were revised in January upward to +148K from +119K and for February 2013 from +236K to +268K.  The average work week was at 34.6 hours and wages added 1 cent in March.

ADP national employment report

ADP reported an increase in private payrolls of 158,000 positions for March.  Small business (1-49 headcount) added 74,000 jobs; medium size (50-499) added 37,000 and large companies (500+) increased workers by 47,000. The breakdown is important because large businesses tend to pay employee more. 

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