The BLS job situation headlines looked good. Jobs growth accelerated this month on the back of last month’s downwardly revised data. Economic intuitive sectors were mixed.

The rate of growth for employment accelerated this month (red line on graph below).

Unadjusted Non-Farm Private Employment – Year-over-Year Change (blue bars – left axis) and Year-over-Year Growth Acceleration / Deceleration From Previous Month (red line – right axis)

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The unadjusted jobs increase month-over-month was average for times of economic expansion.

This month’s data is not quite as good as it seems as last months gains were revised downward.

Economic intuitive sectors of employment were mixed.

This month’s report internals (comparing household to establishment data sets) was fairly consistent with the household survey showing seasonally adjusted employment growing 246,000 vs the headline establishment number of growing 215,000. The point here is that part of the headlines are from the household survey (such as the unemployment rate) and part is from the establishment survey (job growth). From a survey control point of view – the common element is jobs growth – and if they do not match, your confidence in either survey is diminished. [note that the household survey includes ALL jobs growth, not just non-farm).

The household survey added 396,000 people to the workforce.

A summary of the employment situation:

BLS reported: 215K (non-farm) and 195K (non-farm private). Unemployment rate worsened from 4.9% to 5.0%.

ADP reported: 200 K (non-farm private)

In Econintersect‘s March 2016 economic forecast released in late February, we estimated non-farm private payroll growth at 130,000 (based on economic potential) and 210,000 (fudged based on current overrun of economic potential);

NFIB comments on this Jobs Report is towards the end of this post.

The market expected (from Bloomberg):

Seasonally Adjusted Data Consensus Range Consensus Actual Nonfarm Payrolls – M/M change 175,000 to 241,000 210,000 215,000 Unemployment Rate – Level 4.8 % to 5.0 % 4.9 % 5.0 % Private Payrolls – M/M change 175,000 to 237,000 200,000 195,000 Average Hourly Earnings – M/M change 0.2 % to 0.3 % 0.2 % +0.3 % Av Workweek – All Employees

34.4 hrs to 34.5 hrs

34.5 hrs 34.4 hrs

The BLS reports seasonally adjusted data – manipulated with multiple seasonal adjustment factors, and Econintersect believes the unadjusted data gives a clearer picture of the jobs situation.

Non-seasonally adjusted non-farm payrolls improved 776,000 – better than last year but average for March’s in times of economic expansion.

Historical Unadjusted Private Non-Farm Jobs Growth Between Februarys and Marchs (Table B-1, data in thousands) – unadjusted (blue line) vs seasonally adjusted (red line)

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Last month’s employment gains were revised downward.

Change in Seasonally Adjusted Non-Farm Payrolls Between Originally Reported (blue bars) and Current Estimates (red bars)

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Most of the analysis below uses unadjusted data, and presents an alternative view to the headline data.

Unemployment

The BLS reported U-3 (headline) unemployment was 5.0 % with the U-6 “all in” unemployment rate (including those working part time who want a full time job) worsened from 9.7% to 9.8%. These numbers are volatile as they are created from the household survey.

BLS U-3 Headline Unemployment (red line, left axis), U-6 All In Unemployment (blue line, left axis), and Median Duration of Unemployment (green line, right axis)

Econintersect has an interpretation of employment supply slack using the BLS employment-population ratio, demonstrated by the graph below. The employment-population ratio improved 0.1 to 59.9.

Employment-Population Ratio