A Good March Jobs Report, With AJSN Showing Latent Demand Down 800,000 to 16.8 Million – But Just How Good?

Thankfully, and for more reasons than the weather, March was not February.

The high points of this morning’s Bureau of Labor Statistics Employment Situation Summary were strong indeed.  We added 178,000 net new nonfarm payroll positions, nearly triple a published 60,000 estimate.  Seasonally adjusted, we lost 400,000 unemployed, which, after adding the expected improvement over February’s data, meant it was more than that.  The unadjusted unemployment rate fell 0.4% to 4.3%; with March being an average jobs month, the adjusted version matched it. 

Beyond those results, though, the data was weak.  The number of long-term unemployed, or those out of work for 27 weeks or longer, stayed at 1.8 million.  The count of those working part-time for economic reasons, or seeking full-time positions while holding shorter-hours ones, gained 100,000 to 4.5 million.  The two measures showing most accurately how close Americans are to working, the employment-population ratio and the labor force participation rate, each dropped 0.1% to 59.2% and 61.9%.  Average hourly private nonfarm payroll earnings came in at $37.38, up 6 cents but less than inflation. 

The American Job Shortage Number or AJSN, the measure showing how many additional positions could be quickly filled if all knew they would be easy to get, improved 777,000 to reach the following:

The largest changers from February were raw unemployment, contributing 644,000 less, those not looking for the previous year, subtracting 233,000, and those in school or training, bringing 54,000 less to the AJSN.  These were partially offset by more people saying they were discouraged, which added an additional 104,000, and those stopped from working by family responsibilities which contributed 26,000 more.  The share of the AJSN from unemployment was 39.3%, 1.8% less than in February.  Compared with a year before, the AJSN increased 68,000, with no factor adding or subtracting more than 113,000 to the difference.

We know the February report stunk – did the March one offset that?  Unfortunately not.  Combining the last two months’ data gets us a total jobs gain of 86,000, worth something, and 200,000 fewer jobless with 400,000 fewer working part-time for economic reasons, but net nonfarm payroll hourly wages less than inflation, the same unemployed long-term, 326,000 fewer with jobs, and four disturbing January-to-March outcomes:  the labor force participation rate and the employment-population ratio each down 0.6%, 805,000 fewer in the labor force, and over a million more saying they are not interested in working.  Here, not on fluctuations in new positions, is where attention should focus in April.  These are still shaky jobs times at best, and we can legitimately celebrate the new report only to the extent that it did not repeat the previous.  Accordingly, while the turtle did take a step forward, it covered much less ground than his February backtrack.