So-So Job Report

[Arkady]

The job report for March is in. We only created 98,000 jobs, which is poor by recent standards. It's only the third time since the job market hit its stride in mid-2012 that monthly job creation dipped to five figures.

Still, I don't think it's time to push the panic button yet. We had slower job creation last May, for example, and the market came roaring back the very next month with a staggering 297,000 jobs created. So, there's cause to hope that this is just a short-term soft spot. Even in good job markets, employers sometimes get ahead of themselves and have to slow down hiring for a month or two. If we stay at this level next month, that would be more of a concern, since we haven't had two straight weak months for over seven years. But given the expectation of massive deficit spending under Trump (which is normally expected to mean short-term growth at the cost of long-term debt), I don't see why employers would be eager to scale back in the short term.

 

[as seen on tv]

really? then how come the companies processing payrolls say there are 260,000 MORE private sector jobs in March (see below), which doesn't include new government hiring.

https://www.adpemploymentreport.com/2017/March/NER/docs/ADP-NATIONAL-EMPLOYMENT-REPORT-March2017-Final-Press-Release.pdf

 

[marvin martian]

Is this in line with your expectation of "massive devaluation" in the stock market?

 

[Deleted member 21794]

98,000 jobs is weak for sure.

 

[Arkady]

really? then how come the companies processing payrolls say there are 260,000 MORE private sector jobs in March (see below), which doesn't include new government hiring.

https://www.adpemploymentreport.com/2017/March/NER/docs/ADP-NATIONAL-EMPLOYMENT-REPORT-March2017-Final-Press-Release.pdf

The ADP report and the official BLS report don't consistently track each other. They use different methods to cover different groups. ADP is constantly revising its methods to try to get better at predicting where the official numbers will come out, since their value is essentially as an early view, for the business world, on what the report that comes out a few days later will say (which is valuable to traders, for example, in getting the jump on those waiting for official word). But, they don't always get it right.

If you read the actual ADP releases, you'll see that what they're trying to do is to mirror what the official BLS stats will say:

Working in close collaboration with Moody’s Analytics, Inc. and its experienced team of labor market researchers, the ADP Research Institute® has further enhanced the monthly ADP National Employment Report® in order to more closely align it with the final print of the U.S. Bureau of Labor Statistics (BLS) numbers​

Despite those revisions, it's not always dead on.

 

[Arkady]

Is this in line with your expectation of "massive devaluation" in the stock market?

Obviously, stocks and job creation are very different topics.

 

[Arkady]

98,000 jobs is weak for sure.

Yep. However, I wouldn't be too concerned, yet. In addition to the fact we've had weaker and bounced back strongly the next month, there's the fact that it's not even that weak. It's about 0.8% annualized growth, which is pretty much in line with the rate of population growth. So, although it's underwhelming compared to the 216,000 jobs we had in Obama's last month in office, or the 213,000 we averaged in Obama's second term, it didn't actually make anything worse. It just means things stopped getting better. Hopefully, they'll start again next month.

 

[Deleted member 21794]

Yep. However, I wouldn't be too concerned, yet. In addition to the fact we've had weaker and bounced back strongly the next month, there's the fact that it's not even that weak. It's about 0.8% annualized growth, which is pretty much in line with the rate of population growth. So, although it's underwhelming compared to the 216,000 jobs we had in Obama's last month in office, or the 213,000 we averaged in Obama's second term, it didn't actually make anything worse. It just means things stopped getting better. Hopefully, they'll start again next month.

Yeah, I suppose given how sporadic job numbers have been, I can wait another month and see what happens.

 

[Arkady]

Yeah, I suppose given how sporadic job numbers have been, I can wait another month and see what happens.

Just as a side point, they've actually been vastly LESS sporadic than normal. What's unusual about the current job creation situation is how absurdly consistent it has been. We've now gone 78 consecutive months with job creation. That's unheard of. The prior record, before Obama took office, was just 48 months, so this has blown away the last record by two and a half years. Normally, even during great periods for the job market, like the Clinton years, we'll get a random stinker, like August 1997 (31,000 jobs lost, associated with the Asian currency crisis) or May 1995 (16,000 jobs lost). In the last six and a half years, though, even the "bad" months have job creation.

I'm not sure why we've been so much more consistent lately. Maybe businesses are just getting more sophisticated about analyzing needs, so that they're less likely to over-staff and then have to scale back. Or maybe the bigger overall economy means smaller fluctuations in both directions. Or maybe it's just the atmosphere of pessimism business types had during the Obama years, which meant they only hired when it was really obvious they needed to, which kept them from feeling "irrational exuberance" and over-staffing, meaning fewer layoffs when business takes a minor downturn.

 

[worldlymrb]

Anybody really think just because Trump is Prez the Obama Bubble isn't going to pop anytime soon?

Obama's fake recovery was all based on Zero Interest Rates and debt monetization(QE). Funny how the FED was hyping NEGATIVE interest rates last summer when everybody thought Hillary would win. Instead, Trump wins and the FED raises interest rates when the National Debt has risen from $10T to $20T and consumers are maxed out at 2008 financial crisis level again?

 

[marvin martian]

Obviously, stocks and job creation are very different topics.

By the way, here's your thread titled "Good news on the jobs front" from a month when 38,000 jobs were created. Want to take a guess who was president then?

https://www.politicaljack.com/threads/good-news-on-the-jobs-front.92100/

 

[Arkady]

By the way, here's your thread titled "Good news on the jobs front" from a month when 38,000 jobs were created. Want to take a guess who was president then?

https://www.politicaljack.com/threads/good-news-on-the-jobs-front.92100/

Yes. As I pointed out at the time, it was unfortunate that there were only 38,000 jobs created, and that it was the first time we'd had a month in the five figures since March 2015. But, as I said then, and as I repeated now, one weak month doesn't mean much, as we've tended to bounce back the next month.

That month, 36,000 Verizon workers were on strike, and they'd just signed a deal that would put them back to work, so after adjusting for that, it looked stronger. More importantly, there were other signs of strength that month. For example, as I mentioned, the manufacturing workweek increased by a tenth of an hour and the workweek for production and nonsupervisory employees was unchanged. By comparision, in March of this year, the manufacturing workweek fell by 0.2 hours, with overtime falling by 0.1 hours, and the average workweek for production and nonsupervisory employees also fell (where it had held steady in that earlier report).

When you looked at the report as a whole, in May 2016, it looked like a slowdown in hiring had kept rising demand from being met, resulting in expanded hours. That suggested to me that the coming month would show a healthy rebound, as employers who'd been coping with that demand through overtime instead broke down and starting hiring again.

As you know, it turns out I was right. The very next month showed a gigantic gain of 297,000 jobs, and the month after that was very nearly as strong, with 291,000. In addition, the numbers for the bad month were revised upward. So, those three months ended up with an average monthly growth of 210,000, which is terrific.

As I mentioned in that prior post, I also saw cause to regard the job report as good by there having been a big decline in long-term unemployed. By comparison, last month that figure was unchanged. I also saw some cause for optimism back when that 2016 report came out due to the fact the household survey had shown such very strong growth. That's not the best way to measure employment, since it's very erratic from month to month, but as an added data point, it made May 2016 look better (the household survey said 484,000 jobs created). Similarly, last month the household survey showed strong job creation, which is cause to hope, though not nearly as strong as back in May 2016.

Anyway, will we follow a similar path this time? Will we accelerate dramatically out of a soft spot? One can hope. The decline of manufacturing hours and the flat-line of production and nonsuperviosry hours makes it less clear that demand has been building, but it's quite possible that, as with June 2016, we'll have a terrific bounce-back. Here's to hoping.

 

[marvin martian]

Yes. As I pointed out at the time, it was unfortunate that there were only 38,000 jobs created, and that it was the first time we'd had a month in the five figures since March 2015. But, as I said then, and as I repeated now, one weak month doesn't mean much, as we've tended to bounce back the next month.

That month, 36,000 Verizon workers were on strike, and they'd just signed a deal that would put them back to work, so after adjusting for that, it looked stronger. More importantly, there were other signs of strength that month. For example, as I mentioned, the manufacturing workweek increased by a tenth of an hour and the workweek for production and nonsupervisory employees was unchanged. By comparision, in March of this year, the manufacturing workweek fell by 0.2 hours, with overtime falling by 0.1 hours, and the average workweek for production and nonsupervisory employees also fell (where it had held steady in that earlier report).

When you looked at the report as a whole, in May 2016, it looked like a slowdown in hiring had kept rising demand from being met, resulting in expanded hours. That suggested to me that the coming month would show a healthy rebound, as employers who'd been coping with that demand through overtime instead broke down and starting hiring again.

As you know, it turns out I was right. The very next month showed a gigantic gain of 297,000 jobs, and the month after that was very nearly as strong, with 291,000. In addition, the numbers for the bad month were revised upward. So, those three months ended up with an average monthly growth of 210,000, which is terrific.

As I mentioned in that prior post, I also saw cause to regard the job report as good by there having been a big decline in long-term unemployed. By comparison, last month that figure was unchanged. I also saw some cause for optimism back when that 2016 report came out due to the fact the household survey had shown such very strong growth. That's not the best way to measure employment, since it's very erratic from month to month, but as an added data point, it made May 2016 look better (the household survey said 484,000 jobs created). Similarly, last month the household survey showed strong job creation, which is cause to hope, though not nearly as strong as back in May 2016.

Anyway, will we follow a similar path this time? Will we accelerate dramatically out of a soft spot? One can hope. The decline of manufacturing hours and the flat-line of production and nonsuperviosry hours makes it less clear that demand has been building, but it's quite possible that, as with June 2016, we'll have a terrific bounce-back. Here's to hoping.

Got it. So 38,000 jobs under Obama is "good news", while 98,000 under Trump is "so-so". What I expected from you.

 

[Arkady]

Got it. So 38,000 jobs under Obama is "good news", while 98,000 under Trump is "so-so". What I expected from you.

No. Reread. In both cases I was commenting on the job report as a whole, not just the headline number. In the case of the May 2016 report, a soft number on job creation was offset by an increase in hours, suggesting that demand had continued to grow. That made me (correctly) expect a strong bounce-back was coming. In March 2017, hours had stayed steady or declined (depending on which figure you look at), including a decline in overtime. That suggests that the level of hiring was more than enough to meet the demand. That makes me a little more apprehensive about next month. But, we'll see. Even with falling hours and slower job creation, that could just be a one-month hiccup en route to the continuation of this long run of robust job creation.