Friday, March 05, 2021

Comments on February Employment Report

by Calculated Risk on 3/05/2021 09:13:00 AM

The headline jobs number in the February employment report was well above expectations, and employment for the previous two months was revised up slightly.  


Leisure and hospitality gained 355 thousand jobs in February (most of the job gains in February were in Leisure and hospitality).  In March and April of 2020, leisure and hospitality lost 8.2 million jobs, and then gained about 60% of those jobs back.  However, leisure and hospitality lost jobs in December and January - before gaining jobs in February - and are now down 3.5 million jobs since February 2020.

Earlier: February Employment Report: 379 Thousand Jobs, 6.2% Unemployment Rate

In February, the year-over-year employment change was minus 9.475 million jobs. This will turn positive in April due to the sharp jobs losses in April 2020.

Permanent Job Losers

Year-over-year change employmentClick on graph for larger image.

This graph shows permanent job losers as a percent of the pre-recession peak in employment through the December report. (ht Joe Weisenthal at Bloomberg)

This data is only available back to 1994, so there is only data for three recessions.

In February, the number of permanent job losers was mostly unchanged at 3.497 million from 3.503 million in January.

Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The prime working age will be key in the eventual recovery.

The 25 to 54 participation rate was unchanged in February at 81.1% from 81.1% in January, and the 25 to 54 employment population ratio increased to 76.5% from 76.4% in January.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of persons employed part time for economic reasons, at 6.1 million, changed little in February but is up by 1.7 million over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."
The number of persons working part time for economic reasons increased in February to 6.088 million from 5.954 million in January.

These workers are included in the alternate measure of labor underutilization (U-6) that was unchanged at 11.1% in February. This is down from the record high in April 22.9% for this measure since 1994.

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 4.148 million workers who have been unemployed for more than 26 weeks and still want a job.

This does not include all the people that left the labor force. This will be a key measure to follow during the recovery.

Summary:

The headline monthly jobs number was well above expectations, and the previous two months were revised up 38,000 combined.  The headline unemployment rate declined to 6.2%.

Overall, this was a positive report, but the real recovery will not start until the virus is suppressed.  There are still 9.5 million fewer jobs than in February 2020, and 3.5 million people have lost jobs permanently.