Jack Dunn - Reclaiming Common Sense

There are still a few people discussing the February Jobs Report. I doubt that anybody is still analyzing the data.The February Jobs Report was remarkable. The seasonal factors used to convert the non-seasonally adjusted (NSA) Current Employment Statistics (CES) Private Sector Worker number to the Report Seasonally Adjusted (SA) CES number was the lowest since 1981. This was the highest level of NSA CES growth for the month of February since February 1999. This was the highest level of combined Current Population Survey Full-time and Part-time jobs for the month of February since February 2003. Participation increased. Unemployment decreased.


It was a solid report that was almost ignored. The effective unemployment rate (U-7)  that factors in the changes in the participation rate into the current unemployment rate (U-3)  dropped during February. President Trump has a similar participation rate as did President Reagan during February 1981. Participation Matters. Men are still struggling to find full-time jobs. "All the jobs" that men found during February were part-time jobs. They also lost full-time jobs. Women added both part-time jobs and full-time jobs. We have seen a decrease in participation rates for those under the age of 59 since February 2007. We have seen an increase in the workforce participation rates for those 60-64, 65-69, 70-74, and 75 years and older since July 2007. 


There was a large amount of discussion regarding to how strong the jobs numbers were for construction and manufacturing, both in the ADP report and the Employment Situation Report. The good news is that we saw improvement in these categories both in the non-seasonally adjusted data and the seasonally adjusted data. The bad news is that we still have work to do to bring some sectors back to pre-recession levels.

Manufacturing Jobs were up over January 2017 and up over February 2016. The first table indicates the jobs levels by sector from February 2016 through 2017. It is important to note that 12 of 13 sectors saw improvement over January of 2017. Manufacturing jobs have increased for the past few Februaries. The problem here is that we are short 1.3M manufacturing jobs compared to February 2007 and we are not even back to where we were during February 2008.


Construction jobs continue on their path to recovery. We had peak new and existing home sales during the Summer of 2005 and 2006. We saw a peak units number during 2005 and a peak sales price during the Summer of 2006.  We have seen steady improvement in this sector since the depths of the housing recession. This column has written articles showing that we are seeing a spike in non-single family units. What will happen when the single family market exceed 1983 and 1992 levels?


Mining saw improvement over January 2017 - Not compared to February 2016 or 2015. This column has written numerous articles where this decline in mining and logging jobs have been discussed. The problem with low energy prices was that drillers were not hiring people, they were laying off people. These are well paying (not "good" paying) jobs and these are jobs that are predominantly filled by men. Mining and Logging, Construction, and Manufacturing hire women - they just historically have hired more men than women.


Information and Technology saw a similar improvement over the January 2017 levels and a decrease from the February 2016 levels. Once again, there has been a ton of discussions regarding how we are in an information economy and how the technology sector could possible hire a million or more workers, if only we had more H1B visas. The February peak IT level was just over 3.7 million workers... during February 2001. The current level is similar to what we had during February 1994. Do we need more immigrants or might we have some people who cannot find jobs here who are already US citizens?


Government Jobs are Better than February 2007 - Worse than February 2009 - Better than January 2016. What happened to all those people who were going to quit if Donald Trump became President. They quit during January and were rehired during February? The financial sector also sees a similar pattern except that there are more jobs now than February 2009 and fewer jobs than July 2007. It was a "financial crisis" afterall.

This was a solid report. The data indicates that some sectors are doing better than others. Some sectors are not back to pre-recession levels. Some sectors have recovered, or came close to recovering, and are now shedding jobs again. Five Sectors are not back to pre-recession levels. Two sectors have seen declines during the past few years after recovering, or almost recovering, from the Great Recession. Two sectors, IT and Manufacturing, may "never" return to pre-recession levels, the most recent recession or prior recessions, plural. If we see manufacturing return to levels seen during 2007, 2006, or 2005 then we could see real vitality in the economy. President Obama recommended Manufacturing Technology Hubs during his 2014 State of the Union. This could help both sectors, IT and Manufacturing. The hospitality and Leisure sector and the Education and Health Service Sector have been booming. Will they continue to do so? Net-Net: When 12 of 13 sectors add jobs, non-seasonally adjusted, it is a great report.


It's the economy.