The March Jobs Report was supposed to be the last "good" Jobs Report for a While
Instead it showed a spike in Unemployment and Job Losses Exceeding Worker Loss
We are in uncharted economic waters. This data was supposed to show some strength due to when the data is normally collected.Normally it is collected prior to the 12th of the we lost full-time jobs and added part-time jobs. This March we added some, not many, full-time jobs and shed month. We did not see a huge spike in weekly claims during the week ending march 14th. It wasn't until March 21st and March 28th that we recorded historic spikes in weekly claims. The data is remarkable. It is remarkably bad. There were some "bright spots."
This March was not as bad as March 2009. That is not saying much. We saw the seasonally adjusted private sector reported as dropping by 715,000 workers. Reality, the non-seasonally adjusted data, was "only" down 329,000 workers. Normally we see a non-seasonally adjusted surge of 500,000 to 800,000 workers. This is normally adjusted to gains of 180,000 to 240,000 workers. This drop is from a higher starting point than we had during 2009.
The drop was worse than the drop of March 2009, in percentage terms. We lost 784,000 seasonally adjusted private sector workers during March of 2009, based on a loss of 223,000 non-seasonally adjusted workers. This year we lost 329,000 NSA private sector workers. This was converted to a loss of 717,000 Private Sector workers, SA. It was report worse than it was because we were supposed to add 500,000 to 700,000 NSA workers and report the gains closer to 200,000 SA CES workers.
The good news is that January and February saw their numbers revised higher, non-seasonally adjusted. January was revised higher by 32,000 private sector workers from 127,524,000 to 127,556,000. February was revised higher by 64,000 workers from 127,968,000 to 128,032,000 workers. Why were the seasonally adjusted private sector numbers revised lower? January was revised lower by 43,000 workers and February was revised lower by 27,000 workers.
The second data set, the Current Population Survey, recorded its worst March data since, and including, March 2009. March is one of the reasons why the data s seasonally adjusted. What has been missing from most discussions regarding the jobs report is that during March of 2009 we lost full-time jobs and added part-time jobs. This March we lost part-time jobs and full-time jobs. We lost 1.1 million part-time jobs and added 47,000 full-time jobs. It is also important to note that President Trump had added millions of new jobs since taking office while former President Obama had just started adding new jobs during March of 2012 (See the "Five Presidents Series.")
Why is the seasonally adjusted data for March 2020 worse than March 2009? I do not have a good answer for the question other than the seasonal factors are playing with the seasonally adjusted data. We lost 1.7 million NSA CPS FT jobs this March and 1.1 million lost part-time jobs. This was "reported" as a loss of 3 million SA CPS jobs. (Remember that we "only" lost 713,000 private sector workers. There were not working that many multiple jobs apiece.)
Unemployment did not spike as much this March as during March 2009. The Unemployment numbers are just as baffling. The unemployment data spiked by 1.1 million NSA and 1.3M SA. How did we lose 1.7 million workers NSA and only add 1.15 million unemployed workers? The multiple job worker data also took a big hit. (This will be covered in the Men, Women, and Multiple Job Workers Article next week.)
Some good news is that this was a higher participation level during the month of March than March 2015. Remember that participants are full-time jobs, part-time jobs, or unemployed workers. We could have 64 million full-time jobs, or 164 million part-time jobs, or 164 million unemployed workers this month, or any combination of the three that add up to 164 million, and we would have the same number of participants and the same participation rate. Eight years ago the participation rate was 63.61% with an unemployment rate of 7.65%. This March we have a participation rate of 63.27% and an unemployment rate of 4.48%. March of 2015 the data was 62.51% participation and 5.57% Unemployment. Which is better? This March. If we compare both with march of 2000 when we had a participation rate of 67.11% and an unemployment rate of 4.27% the effective unemployment rate during March 2009 was 11.37% compared to 9.96% this March. Former President Clinton had a participation rate of 66.37% and an unemployment rate of 5.80% the March before his re-election.
What does all of this mean? The non-seasonally adjusted data wasn't as bad as the seasonally adjusted data because the seasonal factors were expecting strong results, and the need to temper the enthusiasm, and instead received bad news and amplified the bad news. We have seen more than 8 million non-seasonally adjusted first-time unemployment claims processed during the past two weeks. This was reported as nearly 10 million seasonally adjusted worker filing for benefits. The seasonal factors are amplifying the bad news, again. (See "Weekly Unemployment Claims (CE) Coronavirus Era Spike.") Will we see the Employment Situation data reflect the loss of 8 million, 10 million, or 12 million CES workers, or 8-12 million CPS jobs next month? Probably not. The CES and CPS survey data is very different from the weekly claims data. Will next month's data be "ugly?" Almost certainly.
There was some good news in this jobs report It should have been the final BC, Before Coronavirus, Jobs Report. Next month we will receive the first CE, Coronavirus Era, Jobs Report. When we emerge from this government created shutdown we will receive the AD, After Disruption, data. This data right now is BC, Beyond Crazy. We have fewer unemployed and a lower unemployment rate than during the Great Recession. We have a higher participation rate this march than any March after 2012. The Participation rate may continue increasing as the unemployment rate increases. We are going to see shifts in sectors that are hiring and sectors that are furloughing employees.
This is important: We have furloughed workers, not really unemployed workers. Yes, they are really unemployed. Yes, they are no longer working the jobs that they were working during February. The news is reporting that most of the employers are hoping to restore their workers positions as soon as they are given the all clear to bring back workers. That wasn't the case during 2009.
The "Great Recession" was really three recessions rolled into one big recession. We had the Housing Recession. This was followed by the Jobs Recession. This was followed by the Retail Recession. We emerged from the Retail Recession. We emerged from the jobs recession, the full-time jobs recession, during January of 2017. Were emerging from the Housing Recession. It is unclear if we really wanted to return to the crazy period of 2005-2006 when a historic number of new and existing homes were selling at historic prices. Housing was improving, new and existing. Retail sales were up 6.5% through February, and last year was a record year. We may still receive "BC" data this month for retail sales and housing. We are now in a jobs recession. This column has previously noted that all recessions are a jobs recession.Will April be lower than April 2019? Most likely. What about May or June? Time will tell.
What's next? Next week this column will write articles comparing President Trump to his predecessors in the "Five Presidents" series. He still has overseen the creation of more full-time jobs than former Presidents Reagan, Clinton, George W Bush, and Obama after 38 months in office. The number of total jobs are down over the level of March 2019 so we should see men and women working fewer jobs than last year. The multiple job holder data did dip month to month. It will be interesting to see how we are doing compared to March 2019. Which sectors "took it on the chin?" Most likely we will see a drop in the Restaurant (Leisure and Hospitality) sector. We will receive the Regional and State data in two weeks. This receives some attention in this column during a crisis (Hurricane Harvey and Irma.) It may or may not receive much attention elsewhere. Stay tuned.
It's the Economy.
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