Jobs Data Picture is Clear as Mud
Nonfarm payroll employment rose by 180,000 in March, and the unemployment rate was essentially unchanged at 4.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment increased in con- struction, retail trade, and health care. The number of manufacturing jobs continued to trend down. Average hourly earnings rose by 6 cents, or 0.3 per- cent, over the month.
That 180,000 was more than expected, and the job additions for both February and January were revised upward as well, leading to a frenzied but ultimately pointless CNBC talking head discussion given that the markets were closed for Good Friday. According to various participants, the data tell us:
- The Fed will take longer to cut rates
- We can forget about housing spillover – at least for a month
- The economy is getting stronger
- This was a blowout number
- This is good for stocks
- This is bad for stocks
When we look at the data it tells us none of those things. We have frequently said the headline number undergoes too many subjective adjustments to be meaningful. So we hereby take our monthly look at the raw data – year over year change in employment, non-seasonally adjusted.
Does that tell you anything that would prove or disprove any of the statements above? To us, it looks like the rate of jobs growth could be slowing, bottoming or even sputtering toward acceleration. Perhaps it was better that the news was released on a market holiday, as fewer people had the opportunity to misinterpret it. Move along, folks. There’s nothing to see here.
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What I think is most perplexing is that there was growth in construction and yet there are a few homes laying around unsold. My understanding is that the construction industry goes to work only when something gets sold. I guess the industry is a little healthier than most presume. Yet, there’s still a lot of inventory, not to mention the mortgage malaise.
This definitely thew in a wrench.
I think commercial/office construction is still fairly strong, though that too could fade(Sam Zell is certainly betting that way.)
Also, never underestimate the distortion potential of seasonal adjustments.
[...] jmf wrote an interesting post today onHere’s a quick excerptTo us, it looks like the rate of jobs growth could be slowing, bottoming or even sputtering toward acceleration. Perhaps it was better that the news was released on a market holiday, as fewer people had the opportunity to misinterpret … [...]