There’s a lot more to the employment report than just a couple of headline numbers. This month, it's especially true with the headline number being such a weak jobs added number in February according to the monthly government labor report. Is there reason for concern about the economy? Is it an outlier? Will it be revised?
Let’s dig in a bit deeper and find out. Starting with the headline unemployment rate of 3.8%. We also added +20,000 jobs in February and got some positive revisions from past months totaling +12,000 additional jobs.
The top industries for hiring came in like this:
- #1 Professional & Business Services
- #2 Healthcare
- #3 Wholesale trade
A few important takeaways:
- The unemployment rate was artificially skewed higher due to furloughed government employees who filed for unemployment in January. The decline to 3.8% on weak job growth was a result of it self-correcting.
- The government numbers continue to contain significant revisions.
- Unlike the ADP private sector report, the BLS reported declines in construction and manufacturing in February.
Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for came in at 7.3%. That's down from 8.2% year over year.
Other key takeaways:
1. The real unemployment rate is now the lowest its been since March of 2001 and there are only five months in recorded American history with a lower real unemployment rate than what we currently have. The base rate is also now the lowest it’s been since May of 2001.
2. Those unaccounted for in the base unemployment rate include 1.3 million long-term unemployed, 4.3 million are underemployed (a decline of 838,000) and 1.4 million are marginally attached to the workforce.
3. There were 1,015,000 fewer underemployed and marginally attached workers! The biggest 1-month decline in US history. The real takeaway is this, it’s going to take another month to get past the disruption of the partial government shutdown in these numbers. Within just one report we have info that could be concerning to record-setting improvement in employment.
4. The labor participation rate remained at 63.2% (best in 5.5 years).
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