The February Jobs Report was "The Tale of Two Data Sets"

CPS Jobs Data was weak while CES Worker Data was Strong. Same for JOLTS.

The February Jobs report was a "Tale of Two Data Sets" with Strong Current Population (CPS) Jobs and Unemployment data and Weak Current Employment Statistics (CES) Worker Data reported. The Job Openings and Labor Turnover Survey (JOLTS) is a third data set that is similar to the CES worker data and very different at the same time. The CES data measures workers. The JOLTS data measures job openings, quits, separations, hires and layoffs.

This column published a number of articles regarding the February Jobs Report:

  • "February Jobs Report: 1.2 Million Jobs or 25,000 Workers Added" compared the NSA CPS data (1.2 million jobs) and the SA CES  (25,000 Private Sector Workers. It was a fabulous, remarkable, jobs report.
  • "February Wages and Workers: Wow" examined the sector by sector growth in workers and wages compared to February 2018.  The average weekly wage, NSA, was up 3.44% while the workforce population grew by 1.93%, NSA, from February 2018. This means the total earning power rose by 5.11% during the time from February 2018 to February 2019.
  • "Five Presidents at 25 Months" compared President Trump's accomplishments with those of former Presidents Reagan, Clinton, George W Bush, and Obama after their first 25 months in office." Only former President Clinton and President Trump managed to cut unemployment and add full-time jobs simultaneously.  President Trump has added more full-time jobs than his predecessors, combined.
  • "February Men, Women, Multiple Job Worker Data: Strong" examined the CPS data and found that we had a February record level of Men working and a February record number of women working, and we did not have a record level of multiple job workers this February.
  • "Record Feb. Jobs for Workers over the Age of 55" examined the CPS jobs data by age group. Those 16-19 years of age and 20-24 years of age are "under-participating" while those over the age of 55 are "over-participating."

So what happened from the JOLTS report perspective during February.

Last week we received a First Quarter Layoff Report in addition to the Jobs Report.  The consulting group Challenger, Gray, and Christmas produced a first quarter layoff reportclaiming that we saw the most layoffs during the first quarter of 2019 since the third quarter of 2015. Their report stated

  • First quarter cuts totaled 190,410, 10.3% higher than the 172,601 cuts announced in the final quarter of 2018;
  • First Quarter was  35.6% higher than the 140,379 announced Q1 2018;
  • This was the most layoffs  since Q3 2015, when 205,759 cuts were announced.
  • This was the highest since Q1 2009, when 562,510 cuts were recorded.

This is all well and good. Remember that this is a different survey with a different margin of errors and a different sample size than the JOLTS data.

What does the JOLTS Layoff data have to say about this?

  • First Quarter Layoffs so far are at 3.437 million Year to Date (YTD)
  • Final Quarter 2018 we saw 5.164 million Layoffs and Discharges (3.511M YTD)
  • First Quarter 2018 we saw 5.056 million Layoffs and Discharges (3.652M YTD)
  • Third Quarter 2015 we saw 5.290 million Layoffs and Discharges (3.394M YTD)
  • First Quarter 2009 we saw 7.253 million layoffs and Discharges (5.241M YTD)

If we look at the percent change how do they compare?

  • First Quarter is down 2.11% from the final quarter of 2018
  • First Quarter is down 5.89% from first quarter of 2018
  • First Quarter is up 1.27%
  • First Quarter is down 34.42% from the first quarters of 2009

The Challenger, Gray and Christmas report is measuring thousand of layoffs while the JOLTS data is measuring millions of layoffs and discharges. Two different surveys.

Job Openings Set a February Record at 6.708 million units. There are some in the media who are trying to push the narrative that 7 million job openings is a "healthy level" of Job openings. We never had 7 million job openings until 2018. Never.  The most jobs openings were in Professional Business Services (PBS,) Education and Health Services (EHS,) Trade, Transportation, and Utilities (TTU,) and Leisure and Hospitality (LAH.)

Could we hit 8 million Job Openings this Summer? Would that be considered healthy? This could be a frustration index as easily as a job openings number. There is no information regarding to whether or not these jobs are full-time jobs or part-time jobs. There is no information if these jobs are seasonal jobs or permanent jobs.

February Separations set a February Record at 4.474 million workers. The data changes from category to category while the message is the same. Separations were highest in PBS, TTU, LAH, and EHS.

February Quits set a February Record at 2.856 million workers. This data is similar, not identical to the Job opening and Separations data. The top four sectors wereTTU, LAH, PBS, and EHS.

February Hiring was at an all-time February Record at 4.695 million workers. Once again, the leading sectors were PBS, TTU, LAH, and EHS

When all the data is examined, when the non-seasonally adjusted hiring is offset by the non-seasonally adjusted separations we find that 225,000 net workers were added to the economy, non-seasonally adjusted. We set February records for hires, quits, separations, and job openings. The trend is still our friend. Lay-offs, on the other hands, were not as high as they were last February. We had 1.323 million JOLTS layoffs this February and 1.364 million lay-offs last February. Three of the  sectors with the highest "churn and burn" of job openings, quits, separations and hires are the lowest paid sectors, according to the weekly wage data from the February Jobs Report.

It is difficult, if not unrealistic, to compare two, three, four, or five data sets and expect to come up with consistent results. The CES worker data, the CPS jobs data, the JOLTS job openings data, the Weekly unemployment Claims data, and the data from Challenger, Gray, and Christmas are supposed to give us some insight into the economy. It is similar to the five blind men describing an elephant as one grabs the leg, the other the trunks, the third its tusk, the fourth its side, and the fifth the tail. The first thinks that the elephant is a tree. The second blind man thinks it is a snake. The third thinks that it is an icicle. The fourth thinks it is a rough wall. The final blind man thinks it is a piece of rope. We have the ability to open our eyes and examine the data and detect changes.

It's the Economy.

 Reclaiming Common Sense