Inside the February BLS Jobs Report


This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which included the 12th of the month.

Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.

– Nominal Nonfarm jobs was +236,000. (E). The two previous months’ gains were revised to +119,000 (January) and +219,000 (December). Those had been 157,000 and 196,000. That is a loss (for December and January) of 15,000 from the previous report making the net gain in jobs since the last report of 221,000.

– Real (population adjusted) job growth in January was 116,225. – the Unemployment Rate was 7.736% down from 7.925% in January 2013(B) – Average hourly earnings was $23.82 up from $23.78 in January 2013 (E) – Average work week was 34.5 hours up from 34.4 hours in January 2013 (E) – Private jobs were +246,000. Government jobs were -10,000 (E)

-Good producing jobs were +67,000. The two previous months were revised to +41,000 and +58,000. (E)

-The size of the civilian labor force fell from 155,654,000 to 155,524,000 a decrease of 130,000. (H)

-The labor participation rate (percent of adult non-institutionalized population who are part of the labor force) fell from 63.6% to 63.5%. It was 63.9% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention.

– the size of the civilian non-institutional adult population increased by 165,000 in February to 244,828,000 (H). With a labor participation rate of 63.5% 104,775 more jobs were necessary to keep pace with population growth. We had 116,225 more jobs added than that including the changes from December and January. (H) The Employment/Population ratio was 58.6% the same as the past month.

The civilian non-institutional population is 2,393,000 (H) more than 12 months ago. With a labor participation rate of 63.5% we require 1,519,550 more jobs in the past 12 months to keep pace with population growth. We had 1,473,000 more folks working. The decrease in real (population adjusted) jobs in the past year is 150,500.

According to the 4 week moving average of Initial Jobless Claims, 1,395,000 people lost their jobs in the last 4 weeks. That normalizes to 1,511,000 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is down from the previous month’s 1,525,000 jobs lost/month.

In February 2013 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 6,522,000 down 115,000 from January’s Job Losers and down 665,000 from February 2012. (H)

– Job leavers was 956,000. This includes anyone who retired or voluntarily left working. This down 25,000 from previous month and down 79,000 from February 2012. (H)

-Reentrants was 3,340,000. Reentrants are previously employed people who were looking for a job and found one. This was -175,000 from the previous month and -1,000 from February 2012.(H)

-New entrants were 1,279,000. These are people who never worked before and who are entering the labor force for the first time. This was -8,000 from previous month and -103,000 from February 2012.

The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 236,000 more people are working

– 130,000 fewer people are in the civilian labor force

– 115,000 fewer people lost their jobs

– 25,000 fewer people left their jobs

– 175,000 fewer reentrants obtained jobs.

Looking at this data serves as a reminder that the Employment Situation Report is a good bit more than the two numbers (jobs change and Unemployment rate) which are presented each month.

This is a most interesting BLS Report. On the surface it indicates stronger jobs growth but 1) the lower unemployment rate is party because 130,000 people net left the labor force 2) the Employment Participation Rate is, in terms of macroeconomics, more important that the unemployment rate. It indicates the percent of the population which is contributing to the economy. The Employment Participation Rate is 0.4% lower than a year ago.

This is abstracted from my weekly newsletter on mortgages and macroeconomics.  You can receive this free newsletter by signing up here.

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