The headline seasonally adjusted BLS job growth was terrible and significantly below expectations. Last month’s gains were revised down.

Analyst Opinion of the BLS Employment Situation

The household and establishment surveys did not match. The unemployment rate drop was caused by a very small number of people added to the workforce. The loss of jobs in the retail sector was the drag on the headline numbers.

  • The rate of growth for employment significantly degraded this month (red line on graph below). This is a year-over-year analysis which has no seasonality issues.

  • The unadjusted jobs increase month-over-month was the worst since the end of the Great Recession.
  • Economic intuitive sectors of employment were positive.
  • This month’s report internals (comparing household to establishment data sets) was significantly inconsistent with the household survey showing seasonally adjusted employment improving 472,000 vs the headline establishment number of growing 98,000. 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 145,000 people from the workforce.

    • A summary of the employment situation:

  • BLS reported: 98K (non-farm) and 89K (non-farm private). Unemployment rate improved 0.2 % to 4.5 %.
  • ADP reported: 263K (non-farm private)
  • In Econintersect‘s March 2017 economic forecast released in late February, we estimated non-farm private payroll growth at 105,000 (based on economic potential) and 155,000 (fudged based on current overrun of economic potential);
  • The market expected (from Bloomberg / Econoday):
    • Seasonally Adjusted Data Consensus Range Consensus Actual Nonfarm Payrolls – M/M change 130,000 to 200,000 178,000 98,000 Unemployment Rate – Level 4.6 % to 4.8 % 4.7 % 4.5 % Private Payrolls – M/M change 125,000 to 205,000 170,000 89,000 Average Hourly Earnings – M/M change 0.2 % to 0.3 % 0.3 % +0.2 % Av Workweek – All Employees
    34.4 hrs to 34.5 hrs
    34.4 hrs 34.3 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 grew 593,000 – well below average for times of economic expansion – and the worst showing since 2009.

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