It's All About Employment
L: If you have read the website, you know that Linda (that's me) is part of the blog experience now. It's a clever plan to get Jim to post more often, and with shorter posts (well, maybe someday) and to keep me interested in the project. Let's see how this will work.
Note that all links in our blog are for current data. Should you be reading this beyond April of 2017, the links will take you to current data for that date.
J: Economists are always happy when they see a new data release that provides "teachable moments." The BLS report, "The Employment Situation: March 2017" certainly filled that bill. Analysts and forecasters were expecting an increase of 180,000 net new nonfarm payroll jobs. Some people even raised their forecasts because the ADP report released two days before had indicated a rise of 263,000 such jobs in the private sector in March.
The actual number from BLS was 98,000, which was the smallest gain since the 43,000 in May 2016. By contrast, January 2017 had a rise of 216,000 such jobs and February saw an increase of 219,000. All of these data are on a seasonally adjusted basis, of course.
The only explanation for this surprisingly low number is the awful weather in March in much of the US. The "payroll" survey of about 147,000 business and government agencies covering approximately 634,000 workplaces is always taken during the week that includes the 12th of the month.
That survey measures actual jobs. The other employment survey is conducted every month by the Census Bureau for the BLS. It covers a sample of about 60,000 households.
There was much good news from that "household" survey. Not only did the unemployment rate edge down from 4.7 percent in February to 4.5 percent in March, but that resulted from 472,000 more people being employed in March. That came with no change in the labor force participation rate, which was 63.0 percent in both February and March.
L: So, got that? One survey asks employers, "How many people did you pay this week?" and the answer was 98,000 more than the same week the previous month. The other survey asks people in homes, "How many people in your household want a job and how many people in your household have a job?" The household survey said that 472,000 more people were employed than the month before. Different questions to different entities get different answers.
J: The 4.5 percent unemployment rate was the lowest since the 4.4 percent of March 2007.
[L: That was before the recession.] That's a huge decline from the 10.0 percent rate in October 2009, the highest in over 25 years.
For people age 25 and over with a bachelor's degree or higher, the unemployment rate was only 2.5 percent in March. That low number explains why you see and hear so many stories about the difficulty of hiring qualified people these days. This shortage should be very good news for people graduating from college or graduate school this year.
L: I would like to point out that "having a job" and "having a job that you want" are still different things. On a personal level, we have a nephew who is a college graduate and is employed--in a restaurant AND in a leather goods manufacturer. He'd rather be a journalist. Note that he would be counted twice in the payroll survey (he's paid by 2 different employers) and once in the household survey (he's an employed person).
J: There was also good news on the broadest measure of unemployment (U-6 on Table A-15). It fell to 8.9 percent in March. That was the lowest since December 2007, when the last recession began. This suggests there are great opportunities for job seekers almost everywhere in the US. That is good news for sure.