The
Bureau of Labor Statistics‘ (
Observations from the employment reports include:
* Over half of net jobs gain came from CES (business
birth/death model)
adjustments -- i.e., from jobs in firms formed recently enough they are not
yet included in the survey “sampling frame.”
*
Goods-producing industries added 20,000 jobs; service providers: +291,000. Notable
job gains occurred in leisure and hospitality (+105,000), retail trade (+50,100),
government (+46,000 -- half of which were local teachers), and health care (+44,200).
Employment declined in information (-25,000) and in transportation and
warehousing (-21,500). Total nonfarm employment (155.4 million) is now 3.0
million jobs above its pre-pandemic level in February 2020 (private sector: +3.4
million; public sector: -376,000). That said, employment is also perhaps 5.7
million below its potential if accounting for growth in the working-age
population since January 2006.
Manufacturing lost 4,000 jobs. That result is consistent with the change in the Institute for Supply Management’s (ISM) manufacturing employment subindex, which fell into contraction in February. Wood products manufacturing fell by 1,000 (ISM unchanged); paper manufacturing: -1,100 (ISM unchanged); construction: +24,000 (ISM rose).
* The number of employment-age persons not in the labor force fell (-269,000) to 99.9 million; that level is 4.7 million higher than in February 2020. Because the change in the number of employed and unemployed were roughly balanced, the employment-population ratio (EPR) was unchanged at 60.2% -- still 0.9PP below its February 2020 level.
* With the working-age civilian population growing by 150,000 and labor force expanding by 419,000, the labor force participation rate inched up to 62.5%. Average hourly earnings of all private employees increased by $0.08 (to $33.09), and the year-over-year increase accelerated to +4.6%. Because the average workweek for all employees on private nonfarm payrolls shrank to 34.5 hours, average weekly earnings slipped (-$0.54) to $1,1441.61 (+4.0% YoY). Nonetheless, with the consumer price index running at an annual rate of +6.4% in January, the average worker keeps losing purchasing power. In fact, average hourly wages have lagged CPI since April 2021; average weekly wages since June 2021.
* Full-time jobs rose (+607,000) at 133.2 million; there are now 2.4 million more full-time jobs than in February 2020. For perspective, however, the non-institutional working-age civilian population has risen by nearly 6.5 million during that period. Workers employed part time for economic reasons (shown in the graph above) -- e.g., slack work or business conditions, or could find only part-time work -- inched up by 17,000, while those working part time for non-economic reasons fell (-227,000); multiple-job holders: -97,000.
For a “sanity test” of the job numbers, we consult
employment withholding/FICA taxes published by the U.S. Treasury.
Although “noisy” and highly seasonal, the data show the amount withheld in February
fell by $30.4 billion, to $257.7 billion (-10.5% MoM; -0.2% YoY). To reduce
some of the monthly volatility and determine broader trends, we average the
most recent three months of data and estimate a percentage change from the same
months in the previous year; the average of the three months ending February was
0.4% above the year-earlier average.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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