The Tale of Two Job Report Data Sets.
This March Jobs Report is very important. This is the time of yer that hiring picks up steam. Last week this column wrote an article "Mad March Jobs Forecast" in which it was projected that the Total Private Sector Current Employment Statistic (CES) "jobs number" could jump by 0.66% to 0.70%, comparable to March growth recorded during March 2005, March 2007, or March 2013. If this occurred then it was projected that we could add over 250,000 jobs, officially,possibly over 300,000 "jobs." The CES number measures workers, not jobs. That same column projected a surge in full-time employment, a drop in unemployment, and an uptick in participation, looking at the Current Population Survey (CPS) data from prior years.
Earlier this week the ADP number for "non-farm payroll" was released. We saw month over month, seasonally adjusted, non-farm payroll increase in nine out of ten sectors, plus we saw year over year growth in eight sectors. It was a Strong March ADP Number.
The problem with two different databases being used for the same jobs report is that sometimes they do not agree. This is one of those situations. The "Mad March Jobs Report Forecast" has become a "Crazy March Jobs Report." Stay with me. The CES data is downright ugly while the CPS data is borderline beautiful.
The Ugly: The Private Sector Grew by 561,000 non-seasonally adjusted workers. Adding over half a million workers should be a good thing. We should be adding more workers. The growth of 561,000 workers equals a growth rate of 0.46%. This rate of growth is slower than we have seen since 2010 for the month of March. Last month's rocketing NSA CES number was grounded. What had been originally reported at 121.650 million was revised up to 121.665 million. This took some of the bounce out of the jobs report.
The Deceptive Seasonal Factor. The seasonal factor was misleading, at best, and fictitious, at worse. This column speculated that the authors of the report might skew the seasonal factor low in order to mute the data from the "Trump Economy." They did just the opposite. Even though the growth was comparable to March 2008 and March 2001, pre-recession months, the seasonal factors did not align.How do we add 215,000 jobs using a President Obama seasonal factors and 89,000 using a President TRump seasonal factor. Blame the survey. Blame government math.
Did President Trump inherit a Worker Recession? This column published an article on a 2% tipping point for annual NSA CES Private Sector Growth. The true tipping point may be closer to 1.5%. This month we are at 1.55%. This is better than March 2001 and March 2008 This could be better.
The Non-farms Payroll grew by 1.006 Million Workers. It was reported as a gain of just 98,000 workers. That is one heck of a seasonal adjustment.This was a growth rate of 0.70%. Non-farm workers include government workers. This means that we added almost as many government workers during March as we added private sector workers. Let that absorb a moment.How many workers did we add? Does anybody really know?
The Number of Current Population Statistics Jobs Grew by 1.033 Million Jobs - the vast majority were full-time jobs. This was the second highest level of job creation for the month of March since March 2003. Are they seasonal jobs? probably. Is this good? Yes. The seasonally adjusted data, graph not included here, but in my tweet,was comparable to March 2014 and only lower than March 2012.
The Unemployment Rate Fell and The Participation Rate Improved. This is what we want to see. More people are being hired than are falling off the unemployment roll. Unemployed workers are participants. The problem is that even though the participation rate, NSA, is better than March 2015, comparable to March 2016, and very close to March 2014. The unemployment rate is virtually identical to March 2007. The problem is that the participation rate is still 3% lower than it was during March 2007. The participation Ship was filling with water and starting to seriously list to one side. The bilge pumps appear to be working.
We have the highest level of combined full-time and part-time jobs since July 2007. We lost over 10 million jobs during the depths of the recession. We recovered all of those lost full-time jobs during July 2015 before they started disappearing again during the Fall/Winter of 2015. We regained those jobs during the Summer of 2016 before we lost them during the Fall/Winter of 2016.
This was a crazy jobs report. The combined 525,000 seasonally adjusted full-time and part-time jobs blew away the ADP numbers. The Seasonally Adjusted CES could have been reported closer to 200,000 if we used the March 2008 or March 2009 seasonal factor. Participation is up. Unemployment is down. We are doing better than we were during July 2007 (Combined Jobs) and we are doing worse (Lower participation Rate.) This report will be analyzed by the Multiple Job Holder Level (it went up over 8 Million, again,) the number of men and women working full-time and part-time jobs, the impacts by age group, the impacts by sector, and compare President Reagan to Presidents Reagan, Clinton, Bush 43 and Obama. Hang on. It is going to be a bumpy ride.
It's the economy.
Note: Revisions made to Rolling year data and monthly growth data, as well as seasonal factor for CES after original post.