The widely anticipated March Unemployment Report covering the month of February was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
November: 10.2%…revised to 10.1%
– March Consensus Expectation: 9.7-9.8%
– March Actual: 9.7%
Comments: as expected
II. NON-FARM PAYROLL (click here for definition of this term)
July: loss of 463k
August: loss of 304k
September: loss of 154k
October: loss of 139k
November: loss of 111k…revised to a loss of 127k jobs
December: loss of 11k…further revised to a gain of 64k
January: loss of 85k…revised to a loss of 150k
February: loss of 20k
– March Consensus Expectation: -50k
– March Actual: -36k with revision to February to -26k and revisions to January and December of +35k
Comments: the administration had aggressively managed expectations down for this number indicating the impact of the February snowstorms. In a classic case of managing expectations, when one manages down and comes in on target or close to it, then you declare victory. Standard management move often utilized by those insecure in their positions and with the data.
III. AVERAGE HOURLY EARNINGS
– March Consensus Expectation: .2%
– March Actual: .1%
Comments: no wage growth here which plays into lack of inflation and actual disinflation, if not deflationary fears. You will not hear this, but it is a concern. The lack of wage growth is very real and does not help consumer spending.
IV. AVERAGE HOURLY WORKWEEK
July: 33.0 hours
August: 33.1 hours
September: 33.1 hours
October: 33.0 hours
November: 33.0 hours
December: 33.2 hours
January: 33.2 hours
February: 33.3 hours under previous definition but 33.9 hours using a revised and more broadly defined measure.
– March Consensus Expectation: 33.6
– March Actual: 33.1 hours….!!!
Comments: I am looking for further clarification on this piece of data. Either way, this statistic is bad but if this stat is measured using the newly defined broader measure then it is an absolute disaster! Anybody with clarification, please feel free to chime in.
V. FURTHER COLOR: much like the color referenced in the Duke/CFO Survey I referenced yesterday, the job situation may not be getting worse but it is not showing an indication that it is getting better. If new orders were building, I think we would see it first reflected in a longer workweek.
Markets are buying the better than disaster scenario painted by the experts and have trended higher. I would prefer to look beyond the trees and wonder where and when we will start to see improvements in the workweek and wages which should happen before improvements in the actual rate and in the non-farm numbers. We will have to wait another month….and in my opinion, longer than that.
VI. MARKET REACTION
2yr Tsy: .92%
10yr Tsy: 3.68%
DJIA : +.7%
S&P 500 : +.7%
U.S. Dollar Index: +.12%