Initial Reaction
The headline jobs number fell by 701,00. The Econoday forecast was -150,000 jobs. But none of the numbers reflect the surge in unemployment claims in the last two weeks.
As noted yesterday today’s Jobs Report Will Look Far Better Than It Really Is
In the household survey, the reference period is generally the calendar week that contains the 12th day of the month. In the establishment survey, the reference period is the pay period including the 12th, which may or may not correspond directly to the calendar week.
The mass layoffs mostly started after the BLS competed its surveys.
Forget about -701,000. There are at least 10 million more unemployed than reported today.
The BLS provided this note today.
In March, the unemployment rate increased by 0.9 percentage point to 4.4 percent. This is the largest over-the-month increase in the rate since January 1975, when the increase was also 0.9 percentage point. The number of unemployed persons rose by 1.4 million to 7.1 million in March. The sharp increases in these measures reflect the effects of the coronavirus and efforts to contain it.
Measures from the household survey pertain to the week of March 8th to March 14th.
Government Workers
Federal government employment rose by 18,000 in March, reflecting the hiring of 17,000 workers for the 2020 Census.
Job Revisions
The change in total nonfarm payroll employment for January was revised down by 59,000 from +273,000 to +214,000, and the change for February was revised up by 2,000 from +273,000 to +275,000. With these revisions, employment gains in January and February combined were 57,000 lower than previously reported.
BLS Jobs Statistics at a Glance
- Nonfarm Payroll: -701,000 – Establishment Survey
- Private Nonfarm Payroll: -713,000 – Establishment Survey
- Employment: -2,987,000 – Household Survey
- Unemployment: +1,353,000 – Household Survey
- Involuntary Part-Time Work: +1,267,000 – Household Survey
- Voluntary Part-Time Work: -1,574,000 – Household Survey
- Baseline Unemployment Rate: +0.9 to 4.4% – Household Survey
- U-6 unemployment: +1.7 to 8.7% – Household Survey
- Civilian Non-institutional Population: +130,0000
- Civilian Labor Force: -1,633,000 – Household Survey
- Not in Labor Force: +1,763,000 – Household Survey
- Participation Rate: -0.7 to 62.7% – Household Survey
BLS Employment Report Statement
Total nonfarm payroll employment fell by 701,000 in March, and the unemployment rate rose to 4.4 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it. Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.
Unemployment Rate – Seasonally Adjusted
The above Unemployment Rate Chart is from the BLS. Click on the link for an interactive chart.
Hours and Wages
Average weekly hours of all private employees fell 0.2 hours to 34.2 hours. Average weekly hours of all private service-providing employees fell 0.3 hours to 33.0 hours. Average weekly hours of manufacturers fell 0.3 hours to at 40.4 hours.
Average Hourly Earnings of All Nonfarm Workers rose $0.11 to $28.62 . That’s a gain of 0.39%.
Average hourly earnings of Production and Supervisory Workers rose $0.10 to $24.07. That’s a 0.42% gain.
Year-Over-Year Wage Growth
- All Private Nonfarm rose from $27.76 to $28.62 a gain of 3.1%.
- Production and supervisory rose from $23.28 to $24.07, a gain of 3.4%.
For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will comment further.
Table 15 BLS Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said “better” approximation not to be confused with “good” approximation.
The official unemployment rate is 4.4%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 8.7%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
Final Thoughts
Once again, due to the survey week, this report does not properly reflect the massive amount of layoffs that have taken place.
We will know more in the next couple of weeks as the weekly unemployment claims pile up. I expect the unemployment rate will jump to at least 12% and more likely something closer to 20%.
The US unemployment rate which takes into consideration involuntary part-time work may surge as high as 40%. The consequences will be severe and there will not ve a V-shaped recovery.
A deep recession is coming up.
For discussion, please see Covid-19 Recession Will Be Deeper Than the Great Financial Crisis
Mike “Mish” Shedlock
US gubmint “unemplyment” #’s have no more facticity than gubmint price inflation and GDP #’s. Real unemployment right now is c. 20%…and I am one of the millions currently uncounted. Actual unemployment, thanks to this full-frontal attack of (((Wall Street))) on Main Street, will go to c. 40%.
US unemployment reaching 3rd world levels,Reality is DC has only 2 real options,cut everyone a unemployment check,or declare martial law and confiscate guns,there just aren’t enough prison beds when TSHTF!
-700,000 is not the headline. The household survey dropped 3 million jobs. 1.4 unemployed but 1.6 dropped out of the labor force. Unemployment rate would have been over 5 without that.
Don’t forget all the corporate layoffs coming in Q2, they held off in March so they can take the severance hits in Q2 as they massively lower Q2 rev and earnings. I agree 12% is the base case.
Civil unrest is the obvious outcome.
GE is furloughing half of its jet engine manufacturing staff. That means Pratt-Whitney can’t be that far behind.
Limited use for jet engines while one is confined to ones apartment….
More offensively, economically: Air freight rates from China to both the US and EU are way up, despite “free” oil, plenty of both unused planes and unemployed pilots (normally lots of freight piggybacks on passenger planes, hence why you have to outbid freighters to be allowed to bring a suitcase….).
So now unemployed, much poorer people, are stuck paying more for stuff. That’s what “saving the airlines” (in reality, saving the usual coquetry of banksters and other leeching rabble who lent them money and/or “own” them) accomplishes. As opposed to quickly BKing them and getting the potentially very valuable capital a plane represents, repurposed for something useful. But, in Dystopia, “saving” the leeches is, as always, priority one, two and many.
It looks like they waited until almost April to close everything so that Q1 would be a good quarter. Pres. Trump mentioned something about a second wave of C19 in the fall. Perhaps the plan is to knock C19 down in Q2, Have a rebound in Q3, over which prep is made for greater numbers of sick people, then burn C19 out in Q4. Hopefully someone is thinking about the economic fallout from all this.
On another note, the FDA has approved a COVID 19 antibody test. This will allow people to know if they’ve had the virus already, and allow the total number of people that have had the virus to be estimated. I believe that I came down with it on Feb 10. It was not a fun two weeks. If so, I’d like to donate blood for antibodies, which is a treatment option that is being investigated, or help somewhere else in some other way.
It used to be that aerospace would suffer in a recession. That’s when deficits mattered. Now its seen as a way to get money out into the economy. Lockheed Martin is hiring!
It seems apparent that the vast majority of folks on this discussion board are aware of (or should I say convinced of just in case we’re all mistaken) the rampant corruption in the US government, economic, financial, and other “systems”.
While I can understand why the majority of that majority might still choose to live here (though some may have chosen to leave for other lands or actually live there), it seems especially curious to me why so many still seem passionately involved in and concerned with the corrupt casinos that virtually all so-called “free markets” have deteriorated into?
Actually my exit plan was in full swing and I was going to be making my move in May – of next year…
Unfortunately, the way things look now I will either be stuck, or making the same move sooner but with far fewer resources.
Man, I was pretty much set on heading for Spain this summer…….
Good thing I didn’t go…… Spain and Italy, perhaps Andorra or southern Switzerland, was my preferred destinations…. They’re all doused in virus by now…
I had and still have a plan. And it can be executed with less resources than I would have had next year but it will be difficult.
I grew up here, all my family is here – I even gave many years of my life doing what I was told was necessary to “protect” it and the people in it.
But now I saw the writing on the wall about halfway through the Trump presidency. Nothing will change here because at the end of the day, the people don’t really want it to change. And those who do want it to change only want to change the destination of the free shit from their neighbors to themselves.
I saw the bubble clearly and I knew it would pop eventually and that this time would likely be the last, I just thought I had another year at least.
The virus changed all that.
The Orange Money Messiah did not drain the swamp of crocodiles he brought in the alligators.
It’s called Delusion. The free est country will have the most number of Deluded people. Imagination and delusion are after all two sides of the thinking coin.
Even something like this headline “U.S. dairy farmers dump milk as pandemic upends food markets” raises the issue. While I understand the basic concepts of supply/demand/price, this headline indicates to me that when the primary concern in that situation is price (and of course I’ve heard of similar things being done with grains and other foodstuffs), when there are children/people all over the world, and even in this country, starving or close to it, that something is dreadfully corrupt about the entire “system”.
With regard to milk, the problem is transport to a dairy, and keeping the dairy running. There is no storage for even a couple days of production if processing gets backed up. And if you turn the cows off (dry up, as they put it) you have to get them pregnant again to start the milk back up. So dumping milk is the least worst outcome.
The idea of picking up and leaving because the government and big business are corrupt seems like a bad suggestion. First it fails to take into account that corruption exists in most governments. Also most people want to live where the language a culture are familiar.
Seems like your post is a convoluted way to say: America, love it or leave it!
No, I specifically said “While I can understand why the majority of that majority might still choose to live here …” So I was never suggesting “picking up and leaving because the government and big business are corrupt” … only noting that perhaps a very few had done so.
And my reason for believing that it’s very few who have done so is precisely the same reasons you provided i.e. “First it fails to take into account that corruption exists in most governments. Also most people want to live where the language a culture are familiar.”
My emphasis was on why so many here still seem passionately involved in and concerned with the corrupt casinos that virtually all so-called “free markets” have deteriorated into … IOW, why is everyone always continuing to “play the slots” when they know they are all utterly corrupt?
What’s the alternative, put everything into a bank savings account earning 0.1%? There’s no escaping the corrupt system, but you still gotta live.
I live here because i was born here, my family is here, etc. The opportunities provided by our semi-free market are better than most places. The question is were I could move too? I have thought about this. Cross off any 3rd or 2nd world country, not really excited about living in a backward or semi-backward country. Middle East (hate Americans), communist or dictatorships can be crossed off. Europe is mostly socialists, although i might consider some of them, but not with there “free borders” and many migrants that are not likely to assimilate into the “Western” world culture.
I might consider Iceland or Sweden. Hard to walk to those countries.
Also thought about Australia or New Zealand. Maybe Canada. I could probably find an island or two as well. So the question is how bad is it really, is there anyplace better (5 or 6 places, maybe) and is it worth it to move away from family, or just moving itself, which is fairly disruptive.
It helps if you are independently wealthy, and I am not, because then it is easy to take multiple flights to visit, even for weekends or a week at a time.
I am not wealthy enough for that or even to stop working.
So while I am not happy with a lot of the things going on in the US in government and business, I am not inclined to do the work to move out of the country.
Secure a job, research local areas, etc.
Don’t recomment the med countries unless you’re indepentenly wealthy ( G.Cloney).
Lived in Spain and sure happy to have left 5 years ago.
The southwest of the UK on the other hand has been very good to me, much more so than the US.
I believe that Britain will prosper after this is over and Brexit is done and dusted.
The UK gov. is planning to elimante tarifs on 87% of all goods.
The country that embraces free trade will emerge as a winner.
You people are radiculus. I’m one of those other people who moved to US and let me tell you something – there is no Paradise on planet Earth. If you are looking for it you need to look elsewhere in the universe. In this life everything is relative and with that being said the USA is still one if the best places on that planet. I “love” to listen to people who are born here how they constantly complain about the economy here, the government here, etc. Believe me – you have seen nothing. You think you have a problem? Go see how people live in 80% on that planet and you will think again. I’m american by choice and I love this country because it is still giving people the opportunity of “the sky is the limit”. With the democracy you will always have people voting with their “wallet” because the demand for free stuff is unlimited. Sooner or letter this gets out of proportion and is the main reason for what the politicians are doing because every politician wants to be re-elected. Those are super basic things and I can’t believe how many people can’t get them. With that being said – lately Trump was the best thing that could happen to this country based on what the alternatives are and I’ll be more then happy to vote for him again. Remember one thing – the politicians are still humans, i.e. they make mistakes too. Nothing is absolute in this life – everything is relative. Stay safe :).
A 20% unemployment rate, Yikes! Expect the goverment to lavish resources on the unemployed in a massive vote buying scheme. FDR was the master of this.
The private sector will save us all !
People need to save themselves. I guess that would be the private sector. That is where everything you enjoy gets created and produced.
Are you implying that the government will save us? Are you placing your hopes in big mouthed politicians who use the strongarmed tactics of the State to rob Peter to pay Paul (and also rob Paul to pay Peter)?
Neither can save us alone. That is the lesson of Covid-19. There is good capitalism and good government despite what you may hear.
The private sector has been BANNED by the state…. except for the essential few.
CBO projects unemployment at 9%+ at the end of 2021. That is 1980’s territory with a long way back to worse…
“The consequences will be severe and there will not ve a V-shaped recovery.”
…
Yes.
Now we wait for the inevitable SNAFU when government bureaucracy meets need to get passed fiscal stimulus out the door ASAP.
Coupled with massive fraud as anything rushed will provide the unscrupulous scammers a plethora of opportunities to game.
Sure Tony. No one was unscrupulous or a scammer before.
Our entire government apparatus is nothing more than a group of unscrupulous scammers. So naturally they do what benefits them the most.
Link to NY doctor who has treated >350 cases with 100% cure rate. Relief in 4-6 hours and cure in 6 days.