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March Jobs Report Shows Labor Market Continues Its Slow March Forward
The recovering US job market continued to march forward in March.
Nonfarm payrolls rose by 215,000 vs. a monthly average of 223,000 the previous 12 months. Just keepin’ on, keepin’ on. The unemployment rate edged up to 5.0% but for positive reasons as labor force participation continues to rise. Overall, the labor force grew by nearly 400,000. As Capital Economics notes: “…the labor force has now increased by more than two million in the past five months alone. The participation rate has jumped from a low of 62.4% last September to a two-year high of 63.0% this March. This is a remarkable turnaround in terms of both its speed and magnitude.”
Some context: If the participation rate were holding steady, the jobless rate would be 4%. Actually, both the participation and employment rate seem to breaking higher in recent months:
Particularly positive is the rebound in employment among prime-age workers, those aged 25 to 54.
Other bits of good news: While average hourly earnings are up just 2.3% the past year, combine that rise with an increase in hours worked gets you a total wage increase of 4.2%, notes FirstTrust research. And RSM US economist Joe Brusuelas notes that with “only 1.4 individuals available in the labor force for every job opening the labor market will continue to tighten, setting the state for wage gains going forward.” As this chart illustrates:
And this nice summary from JPMorgan’s Mike Feroli:
Published in EconomicsGiven our expectation for GDP growth of 1.3% (after today’s construction report), this spells another quarter of negative productivity growth. Yellen’s supply-side experiment is looking on shakier grounds when it comes to the purported productivity benefits of running the economy hot, though in fairness she never expressed too much confidence in her outlook for a productivity acceleration. The growth message from today’s report is, to quote Aaron Rodgers, r-e-l-a-x: the economy is not great but it’s not falling off a cliff either. The Fed message is neutral to slightly dovish. Increasing participation is acting as a pressure relief valve on the labor market, obviating any need for a hurried path to the second rate hike.
We continue to become more and more like a European country with low wage jobs that don’t sustain families and hope. When will sane economist and sane media start focusing on job quality instead of pure numeric employment?
Is it 2 million people in the work force or two million jobs? There is a difference especially since most of the growth seems to be in sectors (retail and hospitality)where there are many part-time jobs (under 30 hours) to get around Obamacare. Does a person with 2 or 3 part-time paychecks, including an Uber, count as 2 or 3 jobs when traditionally this would be measured as one person, one full-time job?
Manufacturing jobs down 29,000.
There’s probably a conflation of events going on here, but an increase in the workforce participation doesn’t reflect a healthy, recovering job market (although the ratio shown above does inspire some hope, with the caveat that most of those jobs being offered are service gigs). There’s definitely some anecdotal evidence here in North Carolina that there’s a lot more job opportunities available, but that’s my thin slice view of the local market.
But looking at this, it means that more people have a job, but are working fewer hours. That would seem to reflect the impacts of BarryCare, and the likelihood that family members who previously weren’t working are taking part-time work, swelling the ranks of the employable (participation rate) and actually clocking in to a job.
The median household income data is always a bit old so it’s hard to align it to current payroll numbers, but it’s still weak.
Also, I pimped this from Confounded Interest – hourly earnings are still bouncing around the same level as 6 years ago, and more recently are ticking downward. Which is probably a reflection of more people working, but at lower-paying gigs.
The Obama economy is great. My wife that had a 6 figure salary with benefits is now working two part time jobs making minimum wage and no benefits. Happy Days are here again.