Reclaiming Common Sense

This week the news was mostly focused on what to expect from the ADP Payroll Report, What to expect from the March Jobs Report, what happened with the Weekly Claims data, Democrats making verbal assaults on the President, Joe Biden, is he in or is he out, the Border Crisis, Alexandria Ocasio-Cortez,  and the occasional story regarding the ADP payroll report and the occasional story regarding the Jobs Report. This column focused on the economic data.

(April 1) This was "Jobs Week." This means that you receive ADP Payroll Report and Jobs Report forecast articles from this column. "March ADP May Surprise to the Upside" detailed how all sectors were expected to grow month to month and March to March, seasonally adjusted. It was thought that we would grow annually over 2.00% and month to month by at least 0.15%.

(April 1) The week's first economic report that his column examined was the February Retail Report. This report should have been released during the middle of March not the first day of April. The government shutdown shutdown the release of some economic reports. "February Retail Report Finally Released" details how while the seasonally adjusted month to month sales declined the non-seasonally adjusted February to February data continued to grow. The rolling year growth rate for the past 12 months was just under 5.00%.

(April 3) The monthly Jobs Report forecast article normally takes at least a day to research. This month was no different. "March Jobs Report Forecast: Onward and Upward" was in pretty close agreement with the ADP Payroll forecast. All sectors were expected to grow month to month and March to march, non-seasonally adjusted. All sectors were expected to grow month to month and March to march Seasonally adjusted, with the exceptions of the Mining and Logging sector and the Information Technology sector, March to March. Annual Growth was expected between 1.93% and 2.05% and month to month growth was expected between 0.51% and 0.63%.

(April 3) The ADP report was released Wednesday Morning at 8:15 AM EDT. The headline payroll growth of 129,000 jobs was a surprise to the low side of expectations. "March ADP Payroll Surprised" details how while we did see annual growth of 2.01% and all sectors grew March to March, there was a month to month growth rate of 0.10%. Three sectors reported contractions month to month: Construction, Manufacturing and Financial Services. Final services contracted during Tax Season? Construction contracted during the Spring Building Season?

(April 4)  This week the mainstream media finally decided to comment on the Weekly Unemployment Claims Report or, as they framed it, the firing report. "How Low Can Unemployment Go" is the third article with the same title. It is a good question. We recorded our third consecutive week with non-seasonally adjusted (NSA) first-time claims under 200,000 claims. We have had more than four years with the seasonally adjusted (SA) FTU at or below 300,000 claims. We had the NSA Continuing drop below 2 million for the first time this year and the SA CC is approaching the two year anniversary with the SA CC under 2 million claims. The Insured Unemployment Rate dropped to 1.33%, an all-time low for this week of the year.)

(April 5) Jobs Day. There was a considerable amount of data to unpack. "March Jobs Report Rebound" was another round of "The Tale of Two Data Sets" from February. The CPS jobs data was weak and the CES worker data was strong, the opposite of February when the CPS data was strong and the CES data was reported as being weak. We saw the NSA CES worker data grow at 1.92%, slightly lower than the 1.93% to 2.05% expected. The unemployment level fell to levels comparable to March 1999 and March 2000 and lower than March 1998 and March 2001. The Unemployment rate was lower than all for of these March Unemployment rates.

(April 6) The March Tale of Two Data Sets analysis continued through Friday into Saturday. "March Wages and Worker Data: Up Remarkably" examined the month to month and March to March changes in workers and wages. We saw non-seasonally adjusted growth month to month and March to March in all sectors, as expected. The surprise was that we saw seasonal adjusted reductions in workers in the Construction sector, the Manufacturing sector, and the Government sector month to month. Really? The good news is that we saw increases in wages in all sectors, ranging between 1.59% and 6.11% for an average NSA wage increase of 3.13%. When wages rise and the number of workers rises concurrently then the total wages earned really pops. Total wages grew by  5.28%. This should mean strong Personal Consumption Expenditures reported in the First Quarter Advance GDP report this month.

The week started with April Fool's Day. This may have been the first year that my daughter didn't try to spoof Dad. The economic data has been fooling the "experts" for months. Some people are reporting on the reports and not on the data. The worker data was strong. The Wage data was strong. We are seeing very low weekly unemployment reported in the Weekly Claims reports and very low unemployment levels in the CPS jobs data. Next week we will receive the JOLTS report and many will conflate this data with the unemployment data. Stay tuned. More to follow.

It's the Economy.