by Bill McBride on 4/06/2012 10:17:00 AM
Friday, April 06, 2012
The number of payroll jobs added in March was disappointing, and this is reminding many observers of the slowdown in 2011.
But we also have to remember that this is just one month, and that there were clear reasons for the slowdown last year. In 2011, the economy was negatively impacted by the tsunami, bad weather, high oil prices and the debt ceiling debate. Of course oil prices are high again, but hopefully there will be no natural disasters, and also no threats of defaulting on the debt.
The report wasn't all bad news. It looks like the drag from state and local layoffs is nearing the end, the unemployment rate declined (although partially because of workers leaving the labor force), the number of people working part time for economic reasons declined, and the number of people unemployed for more than 6 months declined - and hourly wages increased a little faster.
Some numbers: There were 120,000 payroll jobs added in March, with 121,000 private sector jobs added, and 1,000 government jobs lost. The unemployment rate declined to 8.2%. U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, declined to 14.5% from 14.9% in February. This remains very high - U-6 was in the 8% range in 2007 - but this is the lowest level of U-6 since early 2009.
The participation rate decreased slightly to 63.8% (from 63.9%) and the employment population ratio also decreased slightly to 58.5%.
The change in January payroll employment was revised down from +284,000 to +275,000, and February was revised up from +227,000 to +240,000.
The average workweek declined 0.1 hours to 34.5 hours, and average hourly earnings increased 0.2%. "The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.5 hours in March. ... In March, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents, or 0.2 percent, to $23.39." This is sluggish earnings growth, and earnings are still being impacted by the large number of unemployed and marginally employed workers.
There are a total of 12.67 million Americans unemployed and 5.3 million have been unemployed for more than 6 months. These numbers are declining, but still very high.
Overall this report was disappointing, and this report will make the April report even more important as analysts try to determine if this is the beginning of slower growth - or if this was just a one month slowdown in hiring.
Percent Job Losses During Recessions
Click on graph for larger image.
This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.
In the previous post, the graph showed the job losses aligned at the start of the employment recession.
Part Time for Economic Reasons
From the BLS report:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 8.1 to 7.7 million over the month. These individuals were working part time because theirThe number of part time workers decreased sharply in March - and is back to 2008 levels - but this is still very high.
hours had been cut back or because they were unable to find a full-time
These workers are included in the alternate measure of labor underutilization (U-6) that declined to 14.5% in March from 14.9% in February - the lowest level since early 2009.
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 5.308 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.426 million in February. This is very high, but this is the lowest number since 2009.
More graphs coming ...