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  • Writer's pictureNick Andriacchi

February Jobs Gains Exceeds Expectations

With the end of another government “incentive” (advance EIC payments), game another employment boom as employers added 678,000 in February. Additionally, Employers are still scrambling to fill vacancies. Openings remained high in January, the Labor Department reported, as did the number of workers quitting their jobs.


As companies have been increasing wages and adding other incentives to encourage talent to return to work, we are seeing evidence that they are coming back. Here is basis for my theory:


• Prime age labor participation rate is up .6% since September

• A HUGE UPWARD REVISION in the October November and December employment number (which happens to be the first full month after the end enhanced UI benefits)

• The size of the labor force increased for the 5th straight month in February.


The January JOLTS report that was just released shows 11.3 million jobs available and another 4.3 million people quit their jobs as The Great Resignation continues.




Analysis of the February Employment Report


· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons ticked up to 7.2%.


· Prime age labor force participation rate (ages 25-54) was up .2% this month at 82.2%. This number is up .6% since September but is still down by .8% since February 2020, the last month before the pandemic started.


· The overall labor force participation is 62.3% similar to last month.


· The average workweek for all employees on private nonfarm payrolls was up .1 to 34.7 hours in January. In manufacturing, the average workweek edged up by 0.4 hour to 40.7 hours, and overtime was up by 0.2 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 34.1 hours.


· In February, average hourly earnings for all employees on private nonfarm payrolls were flat +1 cent to $31.58. In December, average hourly earnings of private-sector production and nonsupervisory employees rose by 8 cents to $26.94.


· APD reported that 475,000 jobs were lost in January

JOLTS Report MARCH 9, 2022

Job Openings


On the last business day of January, the number and rate of job openings were little changed at 11.3 million and 7.0 percent, respectively.


Job openings decreased in several industries, with the largest decreases in accommodation and food services (-288,000); transportation, warehousing, and utilities (-132,000); and federal government (-60,000). Job openings increased in other services (+136,000) and in durable goods manufacturing (+85,000).


Hires


In December, the number of hires was little changed at 6.5 million. The hires rate was unchanged at 4.3 percent. Hires were little changed in all industries. The number of hires was little changed in all four regions.


Separations


Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.


In January, the number and rate of total separations were little changed at 6.1 million and 4.0 percent, respectively. Among the industries, total separations decreased for federal government (-13,000). The number of total separations was little changed in all four regions.


The number of quits edged down in January to 4.3 million (-151,000). The quits rate decreased to 2.8 percent. Quits decreased in retail trade (-69,000) and in information (-20,000) but increased in finance and insurance (+30,000). The number of quits decreased in the Midwest region.


In January, the number and rate of layoffs and discharges were little changed at 1.4 million and 0.9 percent, respectively. Layoffs and discharges increased in retail trade (+48,000) and in information (+40,000) but decreased in federal government (-12,000). The number of layoffs and discharges increased in the Northeast region.


The number of other separations was little changed in January at 391,000. Other separations increased in transportation, warehousing, and utilities (+10,000) and in durable goods manufacturing (+8,000).


The other separations level decreased in information (-9,000); state and local government education (-9,000); and in arts, entertainment, and recreation (-3,000). Other separations were little changed in all

four regions.


Net Change in Employment


Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceed the number of separations, employment rises, even if the hires level is steady or declining.


Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising.


Over the 12 months ending in January 2022, hires totaled 76.4 million and separations totaled 70.0 million, yielding a net employment gain of 6.4 million. These totals include workers who may have been hired and separated more than once during the year.


www.bls.gov/jlt/sizeclassmethodology.htm.


Source: ADP, BLS, Wall Street Journal

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