"Feb. Jobs Last month the Seasonal Factors Skewed the Data Low

It happened again this Month

The monthly Jobs Report can be a market mover. This month we need it to be a market stabilizer. The Market Gyrations have been created by  a fear of the unknown. What is the Coronavirus, or Wuhan Virus? The good news here is that the Jobs data was collected by the 12th of the month, before the major outbreak of the virus. The Jobs Report is created using  two data sets: The Current Population Survey (CPS) jobs and unemployment data and the Current Employment Statistics (CES) Workers and Wages data. The headline data is the Seasonally Adjusted (SA) CES Non-farm Payroll (NFP) worker data. The SA NFP data is different from the SA ADP Private Sector Payroll data that was released on Wednesday. The NFP data includes Government Workers.  What happened this month?

The Month to month data for the CES Private Sector was pointing to strong non-seasonally adjusted growth. The data indicates that we could expect 0.31% to 0.39% growth this month. All Sectors were expected to record non-seasonally Adjusted February to February Growth except Trade, Transportation, and Utilities.It was thought that  we could see 1.62% to 1.74% growth February to February. It was said that we needed to watch the seasonal factors The overall seasonal factor has been dropping for decades.  The Current Population Survey data was pointing towards large gains in full-time jobs, part-time jobs, and participation, even as unemployment fell. This and more was covered in "Feb. Jobs Report: Covid-19 Proof."

We recorded a month to month growth rate of 0.35% or 228,000 Private Sector Workers added. The talking heads were anticipating 175,000 positions to be added this month.  This growth rate is better than February 2019, and it is better than February 2015 and February 2016.  The annual February to February Growth rate was 1.65%. All of this was better than expected or within expectations.  The seasonal factor edged up a little bit from last year. If we used last year's seasonal factors then this year we would have only added 187,000 private sector workers. If we used the February 2016 ,seasonal factor then we would have reported 354,000 seasonally adjusted private sector workers added. This, and more, was discussed in "Feb. Jobs Report: Up Big League."

We have a record level of February Workers this Month. That could not always be said during the prior administration.  We lost 11.387 million non-seasonally adjusted (NSA) Current Employment Statistics (CES) workers between July 2007 and January 2011. We have 9 million more workers than we had during the peak pre-recession month of July

2007. We have 1.939 million more NSA CES workers this February than last February. This is important because "all" recessions are jobs (worker) recessions.

We have more Construction workers this February than during the peak construction years. We have 7.270 million construction workers this February  compared to February 2006 when we had 7.218 million construction workers. We have February record levels of workers in all but two sectors: Information (IT) and Manufacturing. The Manufacturing Renaissance continues this month. It is possible that the current Wuhan Virus situation may encourage American Manufactures to repatriate their production stateside.

Every Sector has added workers under President Trump after 37 months in office. This has not been the case with former Presidents Reagan, Clinton, George W Bush, or Obama.

  • Former President Reagan saw declines in Mining and Logging (M/L,) Construction, Manufacturing, Trade, Transportation and Utilities (TTU,) Information Technology (IT,) and Government.
  • Former President Clinton recorded a decline in M/L.
  • Former President Bush (43) recorded declines in M/L, Construction, Manufacturing, and Professional Business Services (PBS.)
  • Former President Obama recorded declines in M/L, Construction, Manufacturing, TTU, IT, Financial Services (FIRE) and Other Services (OS.)

The only two sectors that grew under all five Presidents after 37 months in office are Education and Health Services (EHS,) and Leisure and Hospitality (LAH.) This will be discussed in more detail in the "Five Presidents at 37 months" article.

Every Sector has received a pay raise during the past year. Every sector except Mining and Logging grew February to February.  Every sector other than Mining and Logging saw their hours worked increase, or stay the same, as compared to last February:

  • The largest wage growth was recorded in M/L, FIRE, PBS, TTU, and LAH
  • The largest growth in hours worked were in IT, FIRE, PBS, OS, and TTU
  • Earnings growth was largest in FIRE, PBS, LAH, OS, and Construction

Even with fewer workers and fewer hours worked Mining and Logging recorded wage growth.

The revisions to the prior months data were remarkable. They were remarkable because January was the annual revision month. The data was skewed last month due to the overall seasonal factor being so low. This month the NSA CES data was revised lower while the SA data were revised higher - something happened with the seasonal factors.

This jobs report was remarkable. There was a lot to say. There is still much more that needs to be said. This report bodes well for the rest of the year. We have had strong back to back jobs reports. We may see an influx in manufacturing workers as inventories are drawn down. We may see a surge in construction as interest rates tumble. This data was better than was reported. The next report will explain how well President Trump is doing compared to his predecessors.

It's the Economy.

 Reclaiming Common Sense