Saturday, April 5, 2014

Employment Update: March 2014

The Bureau of Labor Statistics issued its employment report yesterday (link). BLS reported a gain of 192,000 jobs in March and also revised its February results, lifting February gains from 175,000 to 197,000, an additional gain of 22,000.

The Media reported these gains with an air of great optimism. The numbers were decent in my eyes too, but not enough to become enthusiastic. In effect, after acknowledging the February upward correction, job gains in March fell below February as shown in the month-by-month chart going back to December of 2007:

As of March we had gained 682,000 jobs in 2013 and 542,000 in 2014. So we are lagging 2013. Indeed, if we go back to 2012, we’d gained 829,000 that year. The patterns, therefore, suggest sober reflection more than banging of kettles and hopeful stares at the Dow.

Not surprisingly, translating the current result into the annual projection for 2014, shown in the next graphic, we see that, looking ahead, 2014 looks like it might underperform both 2012 and 2013. I don’t think this gloomy picture will hold. We are improving. Last month the projection was for a total gain of 1.9 million jobs; this month we project 2.2 million. If we have gains like that every month, we’ll be looking fine by December 2014.

Now a look at changes by sector. The following table shows the details:

Of fourteen major sectors, one showed loss of employment (Manufacturing) and one zero growth (Government). The last column of the table compares shares, namely share of total employment and share of total gains. Using that technique, we see that six of fourteen major sectors performed worse, i.e., they gained less than their share of total employment. The worst performer was Government (again).  The best performers were Professional and Business Services and Construction. The Housing sector seems to be recovering—and that is a good sign indeed. Where Housing goes, there the economy tends to follow.

Based on the most recently published and updated BLS statistics, we are still shy of recovering the total of jobs lost in 2008 and 2009. We’ve recovered 95.1 percent of jobs lost but still have 4.9 percent to go. That percentage translates to 422,000 jobs. If we keep growing at 192,000 a month, we’ll have caught up in three months.