by Calculated Risk on 4/01/2011 08:30:00 AM

From the BLS:

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported today.
...
The change in total nonfarm payroll employment for January was revised from +63,000 to +68,000, and the change for February was revised from +192,000 to +194,000.

The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Click on graph for larger image in graph gallery.

The unemployment rate decreased to 8.8% (red line).

The Labor Force Participation Rate was unchanged at 64.2% in March (blue line). This is the lowest level since the early '80s. This is the percentage of the working age population in the labor force. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although some of the decline is due to the aging population.

The Employment-Population ratio was increased slightly to 58.5% in March (black line).

The second graph shows the job losses from the start of the employment recession, in percentage terms aligned at maximum job losses. The dotted line is ex-Census hiring.

The current employment recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse).

This was slightly above expectations for payroll jobs. Over the last three months, the economy has added about 160 thousand payroll jobs per month (188 thousand private payroll jobs per month). I'll have much more soon ...

by Calculated Risk on 3/31/2011 08:11:00 PM

Earlier:
• Kansas City Manufacturing Survey at Record High, Chicago PMI Strong in March
• Employment Situation Preview: More Jobs, but still Grim

This is one of several industry specific indexes I track each month.

Click on graph for larger image in graph gallery.

The index increased to 100.7 in February indicating expansion.

Unfortunately the data for this index only goes back to 2002.

From the National Restaurant Association: Restaurant Industry Outlook Improved in February as Restaurant Performance Index Stood Above 100 for the Fifth Time in Six Months

The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.7 in February, up 0.4 percent from its January level. In addition, February represented the fifth time in the last six months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“February’s RPI gain was driven by solid improvements in the same-store sales and customer traffic indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported positive same-store sales and customer traffic results in February, after January’s results were dampened by extreme weather conditions in many parts of the country.”

“In addition to improving sales and traffic indicators, restaurant operators’ outlook for capital spending hit a 40-month high, while their expectations for staffing growth rose to the highest level in nearly four years,” Riehle added.
...
Restaurant operators reported a solid improvement in same-store sales in February. ... Restaurant operators also reported a net increase in customer traffic levels in February.
...
Bolstered by an improving sales outlook, restaurant operators’ plans for capital spending rose to its highest level in 40 months. ... For the fifth consecutive month, restaurant operators reported a positive outlook for staffing gains in the months ahead.

Increased traffic and sales, and a positive outlook for capital spending and hiring ... a solid report. Also, February was a record high sales month for the restaurant industry.

by Calculated Risk on 3/31/2011 05:18:00 PM

On the Irish banks from the Irish Times: Irish banks require an extra €24 billion recapitalisation

Ireland’s beleaguered banking sector is to be recapitalised by a further €24 billion and restructured around two core retail banks ... This is the fifth attempt to recapitalise the banks and brings the total cost of bailing out the sector from €46 billion to €70 billion.
...
[Minister for Finance Michael Noonan] indicated the Government would seek "significant contributions" from subordinated bondholders in the banks to contribute to the cost of recapitalising the sector.

Mr Noonan also signalled the Government was no longer considering the imposition of losses on senior bondholders in Bank of Ireland and Allied Irish Banks. However, he said the Government but would re-examine the possibility of imposing losses on senior bondholders at Anglo Irish Bank, if that lender required additional capital.

Here is a look at European bond spreads from the Atlanta Fed weekly Financial Highlights released today (graph as of March 30th):

Click on graph for larger image in new window.

From the Atlanta Fed:

Most peripheral European bond spreads (over German bonds) continue to be elevated, particularly those of Greece, Ireland, and Portugal, with the latter two countries seeing their financial situations worsening.

Since the March FOMC meeting, the 10-year Greece-to-German bond spread has declined by 38 basis points (bps), through March 29. Also, the Spanish spread has declined by 17 bps.

However, the spread for Ireland and Portugal has risen by 49 bps and 44 bps, respectively.

Here are the Ten Year yields for Ireland, Portugal, Greece, and Germany. The spreads to Germany widened more today with Greece up to 948 bps, Ireland up to 687 bps, and Portugal up to 505 bps. The good news is the spreads have been declining for the other European countries.

by Calculated Risk on 3/31/2011 02:36:00 PM

Tomorrow the BLS will release the March Employment Situation Summary at 8:30 AM ET. The consensus is for an increase of 195,000 payroll jobs in March, and for the unemployment rate to hold steady at 8.9%.

• The weak payroll report in January was blamed on the weather (only 63,000 jobs added after revision). So there might have been some bounce back in February (192,000 payroll jobs added). The two month average was 127,500 payroll jobs added (145,000 private). Anything less in March would be very disappointing.

• The BLS reference period is the calendar week that contains the 12th day of the month (or pay period including the 12th for the establishment survey). There were several significant world events in March, especially in Japan (the earthquake was on March 11th) and Libya. Sometimes hiring can be delayed due to world events, but based on the timing, I don't think there will be any impact on the March report.

• Usually the ISM manufacturing and service reports are released before the BLS employment report. Not this month because the first Friday of the month is on the 1st (Happy April Fools' Day!). However all of the regional Fed manufacturing surveys and the Chicago PMI indicated strong expansion in March.

• Weekly initial unemployment claims averaged 394,250 in March, about the same as in February (392,500). That is the good news (fewer layoffs), but so far hiring hasn't picked up.

Click on graph for larger image in graph gallery.

• ADP reported Private Employment increased by 201,000 from February to March on a seasonally adjusted basis, and has averaged 211,000 over the last four months.

And some less optimistic news:

• Consumer Sentiment decreased sharply in March. This is frequently coincident with improvements in the labor market - but also strongly related to gasoline prices (Gasoline was probably the reason for the decline in March).

The final March Reuters / University of Michigan consumer sentiment index declined to 67.5 from the preliminary March reading of 68.2 - and down from 77.5 in February. This is the lowest level since November 2009.

• And on unemployment: Gallup Finds U.S. Unemployment Rate at 10.0% in March NOTE: The Gallup poll results are Not Seasonally Adjusted (NSA), so use with caution. But this does suggest a seasonally adjusted unemployment rate slightly higher than the 8.9% in February.

• Even if the payroll report shows improvement, the employment situation remains grim. There are 7.4 million fewer payroll jobs now than before the recession started in 2007 with 13.7 million Americans currently unemployed. Another 8.3 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6 million have been unemployed for six months or more.

If the BLS reports 200 thousand payroll jobs added tomorrow - that will be welcome - but it is just a small step in the right direction. Many of the unemployed and marginally employed will not see any improvement for some time.

My guess is in the 150,000 to 175,000 range for payroll jobs, with the unemployment rate increasing slightly.

by Calculated Risk on 3/31/2011 11:00:00 AM

• Note: The Irish bank stress test results will be released at 4:30 PM local time (11:30 AM ET). The Irish Times has a live blog discussing the results.

• From the Kansas City Fed: Survey of Tenth District Manufacturing

Growth in Tenth District manufacturing activity accelerated rapidly in March, posting a record high for the second straight month. Expectations moderated slightly from last month, but still remained solid. Price indexes for raw materials reached historically high levels, and more firms indicated plans to pass cost increases on to customers.

The month-over-month composite index was 27 in March, up from 19 in February and 7 in January. This reading set a new all time survey high. ... The employment index inched higher from 23 to 25, also a new survey record.

This is the last of the regional Fed surveys for January. The regional surveys provide a hint about the ISM manufacturing index, as the following graph shows.

Click on graph for larger image in graph gallery.

The New York and Philly Fed surveys are averaged together (dashed green, through March), and averaged five Fed surveys (blue, through March) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through February (right axis).

The regional surveys suggest the ISM manufacturing index will in the 60+ range (strong expansion). The ISM index for March will be released tomorrow, April 1st. The consensus is for a decrease to 61.2 from 61.4 in February.

And from earlier this morning ...

• From the Chicago Business Barometer™ Decelerated: The overall index decreased to 70.6 from 71.2 in February. This was slightly above consensus expectations of 70.0. Note: any number above 50 shows expansion, so this is a strong reading.

"EMPLOYMENT grew to its second-highest level since February 1973." The employment index increased sharply to 65.6 from 59.8. This is the highest level since December 1983.

"NEW ORDERS increased to the highest point since December 1983". The new orders index decreased to 74.5 from 75.9.

Prices were up sharply, but over all this was a strong report.

by Calculated Risk on 3/31/2011 10:16:00 AM

A quick note: The Irish bank stress test results will be released at 4:30 PM local time (11:30 AM ET).

The Irish Times has a live blog discussing the results.

Here are the Irish yields from Bloomberg for 2 year and 10 year bonds.