Jobs Up 303,000 Full Time Employment Down 6,000 In March -

Jobs Up 303,000 Full Time Employment Down 6,000 In March

Apr 05, 2024Jeremy ParkinsonFinance0

Nonfarm payrolls and employment levels from the BLS, chart by Mish.From September 2020 through early 2022, nonfarm payroll job gains and full time employment changes tracked together.Starting around March of 2022, a divergence between employment and jobs became very noticeable, and I have been discussing the divergence since then.Payrolls vs Employment Gains Since March 2023

Nonfarm Payrolls: 2,927,000

Employment Level: +642,000

Full Time Employment: -1,347,000

Payrolls vs Employment Gains Since May 2022

Nonfarm Payrolls: 6,205,000

Employment Level: +3,152,000

Full Time Employment:+264,000

Payrolls are up by 6.2 million since May of 2022, but full time employment up only 264 thousand.No amount of BLS smoothing can hide this, but hardly anyone discusses it.Q: What’s going on?
A: People are working multiple part time jobs and or semi-retired boomers are working part time.Job Report Details

Nonfarm Payroll: +303,000 to 158,133,000 – Establishment Survey

Civilian Non-institutional Population: +173,000 to 267,844,000

Civilian Labor Force: +469,000 to 167,895,000 – Household Survey

Participation Rate: +0.2 to 62.7% – Household Survey

Employment: 498,000 to 161,466,000 – Household Survey

Unemployment: -29,000 to 6,429,000- Household Survey

Baseline Unemployment Rate: -0.1 to 3.8% – Household Survey

Not in Labor Force: -296,000 to 99,898 – Household Survey

U-6 unemployment: +0.0 to 7.3% – Household Survey

Nonfarm Payroll Change by Sector
Government and Health Services are related to the surge of illegal immigrants and the need to address them. Social assistance jobs rose by 12,000 in January, 21,000 in February, and 9,000 in March.Government jobs rose by 60,000 in January, 63,000 in February, and 71,000 in MarchChange in Nonfarm Payrolls January 2022 to February 2024
Monthly Revisions

The change in total nonfarm payroll employment for January was revised up by 27,000, from +229,000 to +256,000.

The change for February was revised down by 5,000, from +275,000 to +270,000.

With these revisions, employment in January and February combined is 22,000 higher than previously reported.

Part-Time Jobs

Involuntary Part-Time Work: -68,000 to 4,308,000

Voluntary Part-Time Work: +593,000 to 22,902,000

Total Full-Time Work: -6,000 to 132,940,000

Total Part-Time Work: +691,000 to 28,632,000

The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.Hours and WagesThis data is frequently revised.

Average weekly hours of all private employees rose 0.1 hours to 34.4 hours.

Average weekly hours of all private service-providing employees was flat at 33.3 hours.

Average weekly hours of manufacturers was flat at 40.0 hours.

An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 160 million, it’s more significant than it appears at first glance.Hourly EarningsThis data is also frequently revised. Here are the numbers as reported this month.Average Hourly Earnings of All Nonfarm Workers rose $0.12 to $34.69. A year ago the average wage was $33.31. That’s a gain of 4.14%.Average hourly earnings of Production and Nonsupervisory Workers rose $0.07 to $29.79. A year ago the average wage was $28.58. That’s a gain of 4.23%.Year-over-year wages are keeping up with inflation after underperforming for many months.Unemployment Rate BLS unemployment data, chart by MishThe unemployment rate hit a 50-year low in January and April of 3.4 percent. It’s now 3.8 percent.The unemployment rate has bottomed this cycle and will generally head higher.Alternative Measures of Unemployment Table A-15 Alternative Measures of Labor, chart from BLSTable A-15 is where one can find a better approximation of what the unemployment rate really is.The official unemployment rate is 3.8%.U-6 is much higher at 7.3%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.Birth Death ModelStarting January 2014, I dropped the Birth/Death Model charts from this report.The birth-death model pertains to the birth and death of corporations not individuals except by implication.For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.The model is wrong at economic turning points and is also heavily revised and thus essentially useless.Birth-Death Methodology ExplainedEvery month this subject comes up. I gave a detailed explanation of the model and why the hype is wrong in my December 8, 2023 post How Much Did the Huge 412,000 Birth-Death Adjustment Impact October’s Job Report?The month does not matter. If you think the model has a big impact, please click on the above link for why it doesn’t.Household Survey vs. Payroll Survey

The payroll survey (sometimes called the establishment survey) is the headline jobs number. It is based on employer reporting.

The household survey is a phone survey conducted by the BLS. It measures employment, unemployment and other factors.

If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.Can the Jobs and Employment Numbers Both Be Reasonably Correct?The answer is yes (discounting measurement error) because they measure different things. A person working three part time jobs counts for three jobs but only a single person employed.I have repeatedly asked ADP to account for duplicate social security numbers but they won’t. Amusingly, the BLS wants to, but the employees tell me they can’t because “they don’t have access to the data for security reasons.”This is a simple sort-merge program but alas, we depend on a phone survey for employment numbers.Notably, discrepancies like these don’t last for years unless there is some truth to the employment numbers because measurement errors are random.BLS Stats of the Month

Employment +498,000

Part time employment +691,000

Full time employment -6,000.

Every month I caution the numbers do not add up but the discrepancy this month is huge.Final ThoughtsThis report is worse than headline numbers indicates. I said the same thing for the last four months, and it’s generally been that way for over a year.There was one big positive this month: Employment jumped even though it was all part time.Negatives include falling full time employment and another big surge in government jobs.Government plus private education and health added 159,000 of the 303,000 jobs in the establishment survey. Most of that is related to the surge in illegal immigration.It’s easy to make whatever claims you want this month. I point out the positive and negatives to allow that.More By This Author:Ford To “Re-Time” New EV Production, Expand Hybrid ProductionHow Much Treasury Issuance Does the U.S. Add Every Month to Finance Debt?Ominous Technical Trends For U.S. Treasury Bulls, Three Durations