by Bill McBride on 4/04/2014 10:19:00 AM
Friday, April 04, 2014
First, a milestone: Private payroll employment increased 192 thousand in March and private employment is now 110 thousand above the previous peak (total employment is still 437 thousand below the peak in January 2008). Of course the labor force has continued to increase over the last 6+ years, and there are still millions of workers unemployed - so the economy still has a long way to go.
Important: Although this was a slow recovery compared to most previous recessions, this was actually a relatively fast recovery compared to recessions following a severe financial crisis. It is easy to complain about policy makers, but we have to recognize that some policies actually helped ease the pain for millions of workers. There is more work to do, but no sentient being would want to return to the policies of 2001 through 2006 that caused the crisis!
There will be another milestone this summer when total non-farm employment will be above the pre-recession high (the unprecedented large number of government layoffs have held back total employment).
Overall this was a decent employment report. Hopefully job growth will be averaging over 200,000 jobs per month soon. The economy added 533 thousand jobs in Q1 this year compared to 618 thousand in Q1 2013 - not far behind last year considering the severe winter this year. I still expect stronger employment growth in 2014 than in 2013 even with the relatively poor start to the year.
Earlier: March Employment Report: 192,000 Jobs, 6.7% Unemployment Rate
Employment-Population Ratio, 25 to 54 years old
Since the participation rate declined recently due to cyclical (recession) and demographic (aging population) reasons, an important graph is the employment-population ratio for the key working age group: 25 to 54 years old.
In the earlier period the employment-population ratio for this group was trending up as women joined the labor force. The ratio has been mostly moving sideways since the early '90s, with ups and downs related to the business cycle.
The 25 to 54 participation rate was unchanged in March at 81.2%, and the 25 to 54 employment population ratio increased to 76.7%. As the recovery continues, I expect the participation rate for this group to increase.
Percent Job Losses During Recessions
This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses. At the recent pace of improvement, it appears employment will be back to pre-recession levels mid-year (Of course this doesn't include population growth).
In the earlier 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) was little changed at 7.4 million in March. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work.This suggests significantly slack in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that increased slightly to 12.7% in March from 12.6% in February.
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 3.739 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 3.849 in February. This is trending down, but is still very high.
Long term unemployment remains one of the key labor problems in the US.
State and Local Government
This graph shows total state and government payroll employment since January 2007. State and local governments lost jobs for four straight years. (Note: Scale doesn't start at zero to better show the change.)
In March 2014, state and local governments added 9,000 jobs.
It appears state and local employment employment has bottomed. Of course Federal government layoffs are ongoing.
All things considered, this was a solid report. Hopefully, now that the severe weather is behind us, the pace of employment growth will pick up.