US Employment

Honestly, I expected that Friday’s employment report would show a much bigger increase than the 227,000 gain reported for total payrolls. I’m sure the number will be revised higher, just as January’s preliminary estimate was increased by 41,000 to a gain of 284,000. On the other hand, I wasn’t disappointed by the 428,000 jump in the household measure of employment. Even better was the extraordinary 879,000 increase in the household measure that is adjusted to be more comparable to the payroll measure. That’s more like it!

To derive a household employment concept more similar to the payroll survey, the Bureau of Labor Statistics data subtracts from total household employment agriculture and related employment, the self-employed, unpaid family workers, paid private household workers, and workers on unpaid absences, and then adds nonagricultural wage and salary multiple jobholders. The resulting employment series is then seasonally adjusted.
 

Now get this: Over the past three months, payroll employment is up 734,000, while the household measure is up 1.45 million. The household measure adjusted to be equivalent to payroll employment is up 1.54 million.

What about the notion that mild winter weather has distorted the payroll numbers to the upside and that there will be payback during the spring and summer months? I don’t buy it. I was, therefore, encouraged, in a perverse way, to see that construction and retail employment fell 13,000 and 7,400, respectively, during February. These are highly seasonal industries and lost jobs last month despite the unseasonably mild weather. There was plenty of positive data that require no perverse spins to make them so:

(1) The civilian labor force rose 476,000 during February after a 508,000 gain in January, the largest back-to-back increase since February 2003. It suggests that discouraged workers are starting to reenter the labor force because they perceive that the labor market is improving.

(2) In the household survey, full-time employment rose 563,000 in February, while part-time fell by 163,000. Full-time employment is now the highest since February 2009.

(3) Average weekly hours in manufacturing rose to 41.0 hours, a high for the series going back to 2006. The index of aggregate weekly hours rose 0.5% in manufacturing. This index was up 0.2% for total private industries. (More for subscribers.)