Friday, May 6, 2016

Holy Smokes, Batman! Even Worse Than The Headline Suggested. US Payrolls Gain Lowest In Seven Months. But Hey! Hourly Wages Up 8 Cents -- Reuters; April, 2016, Jobs Report; Private Jobs Added In April Miss Forccasts By A Country Mile; Softest Overall Monthly Jobs Report In Three Years -- May 6, 2016

Did anyone else besides me miss this? If so, you are excused. The numbers were buried deep in the story. This has to do with the number of jobs added by the private sector in April. Analysts expected to see 195,000. In fact, they came in at 165,000.

This was the softest overall monthly jobs added in three years but you would never know that. Mainstream media stories are being written and edited by the Obama administration

In addition, the March numbers were revised down 6,000 to 194,000. See below.

The preview for today's job report:
  • nonfarm payrolls: up 200,000
  • unemployment rate: 4.9%
  • average hourly earnings, mom: up 0.3%
  • average hourly earning, yoy: up 2.4%
  • average weekly hours worked: 34.5
The forecast for headline job gains is right where economists obsessed about just a few months ago. Anything below 200,000 was troubling.
"As we approach full employment, the monthly job growth of 200,000 may not be sustained."
"But this isn't a problem."
To put things in perspective, we haven't seen negative employment growth for 65 straight months.
So, now that we are no longer obsessed with job growth, analysts are now obsessed with labor force participation: and it's going up. Huge turnaround in just the past few months. The steep downward trend turned up in the past few months.

In recent history, labor force participation peaked at 66.5% in 2007, but from there fell sharply to 62.5% in late 2015. Most recently, "we're" back to 63%.

Happy days are here again.

As usual, the 800-lb gorilla was not mentioned. A blind spot.

Two days ago, this report, from CNBC:
Private job creation slowed even further last month as firms added just 156,000 jobs in April, ADP said in a Wednesday report.
"The job market appears to have stumbled in April. Job growth noticeably slowed, with some weakness across most sectors. One month does not make a trend, but this bears close watching as the financial market turmoil earlier in the year may have done some damage to business hiring," Mark Zandi, chief economist at Moody's Analytics, said in a statement.
Economists polled by Reuters expected the number to come in at 195,000.
In March, private payrolls were revised down 6,000 to 194,000.
The Report

The U.S. economy added the fewest number of jobs in seven months in April and Americans dropped out of the labor force in droves, signs of weakness that cast doubts on whether the Federal Reserve will raise interest rates before the end of the year. 
Nonfarm payrolls increased by 160,000 jobs last month as construction employment barely rose and the retail sector shed jobs, the Labor Department said on Friday.
That was the smallest gain since September and below the first-quarter average job growth of 200,000
For newbies, anything less than 200,000 suggests economic stagnation.
Forecasts were way off.
Employers added 19,000 fewer jobs in February and March than previously reported. While the unemployment rate held at 5.0 percent that was because people dropped out of the labor force.
Economists polled by Reuters had forecast payrolls rising 202,000 last month and the jobless rate unchanged at 5 percent.
The stepdown in job growth could raise concerns that the weakness in overall economic activity was spilling over to the labor market. Economic growth slowed sharply in the first quarter this year.
Buy hey! It wasn't all bad. Average hourly earnings were up ... drum roll ... 0.3% last month -- the year-on-year increase is now 2.5% -- still below the 3.0% the Fed says it needs to see. 
Not mentioned was the average weekly hours worked. 

Remember, the Magic Numbers:
First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
New jobs: 200,000 (< 200,000 new jobs: economic stagnation)
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters

No comments:

Post a Comment