Reclaiming Common Sense

There are two headline grabbing reports that will be released this week, the Monthly Employment Situation Report from the Department of Labor and the ADP Jobs Report. This column has published two articles on the Employment Situation Report: "Mad, March Jobs Forecast" and "Worker Expansion May Be Coming." This month should be a great month for both the non-seasonally adjusted data and the seasonally adjusted data. Last month the ADP report came as a bit of a surprise to most commentators. The February ADP Report was very strong - reporting 298,000 seasonally adjusted jobs added. What should we expect from the ADP report this month?

We should see Seasonally Adjusted Job Growth in nine sectors, year over year. We should see growth in Construction, Professional and Business Services, Health and Education, Leisure and Hospitality, Trade, Transportation, and Utility, IT, Financial Services, and the "Other" sectors. The manufacturing sector could see improvement, likewise. The mining sector could be flat or decrease by up to 2% The overall growth rate for the entire workforce may be between 1.80% and 2.02%. The annual rate of growth during January was 1.86%. The Annual growth rate during February was 1.89%. Last March the growth rate was  2.13%. It would be phenomenal if the seasonally adjusted annual rate exceeded 2.00%. A growth rate of 1.89% should yield a growth of 236,000 jobs. If we saw 2.02% that would be an addition of 394,000 jobs. 

We should see similar month over month growth. We may see a flat-line or slight decrease in the number of seasonally adjusted Mining and Manufacturing Sector jobs. We should see the strongest growth in Construction, Professional and Business Services, and the Health and Education Sector We have seen 0.16% to 0.23% month to month, February to March, growth over the past six years.If we see that range of monthly growth then the seasonally adjusted private sector number would vary between 198,000 and 289,000 seasonally adjusted private sector jobs added. 

If we hit it out of the park then we could soar through the 300,000 job level and approach the 400,000 level. The problem here is that this is using seasonally adjusted data to project seasonally adjusted data. The ADP report does not release the non-seasonally adjusted data with its seasonally adjusted data.It is fairly certain that the monthly growth rate will exceed 0.20% (247,000 Jobs.) It is unlikely to exceed last year's 2.13%.  If we see 0.18% to 0.20% monthly growth then we should see 1.90% to 2.10% annual growth . Can we handle more good news?

It's the economy.