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  • Writer's pictureNick Andriacchi

February Jobs Report – Coming Back to Earth

The February Jobs report beat economists’ expectations (+275,000 vs +198,000). 


BUT……. Unemployment was also higher by .2%, which was more than the flat reading economists expected.  Big downward revisions in January to 229,000, from the initially reported 353,000. Job growth in December also was revised down to 290,000 from 333,000, bringing the two-month total to 167,000 fewer jobs than initially reported.


Other Highlights:


·       Employment in temporary help services was down (-15,400).  Big downward revisions for December and January totals (-167,000).

 

·       Average hourly earnings rose just 0.1% for the month, moderating quite a bit from January’s robust +.6%. *See additional info on this in the summary

 

·       Health care, government, and bars and restaurants were the big winners last month.  

 

·       The JOLTS report estimates that there are 8.9 mm open jobs, little changed from November. 



Job creation skewed toward part-time positions. Full-time jobs decreased by 187,000 while part-time employment rose by 51,000, according to the household survey. An alternative jobless measure, sometimes called the “real” unemployment rate, that includes discouraged workers and those holding part-time jobs for economic reasons rose slightly to 7.3%.


Last month, I speculated that the high wage growth number (+.6%) was mostly due to the unexpected drop in the average number of hours worked. 


Here again is the formula used to calculate wage gains:


All employee payroll divided by All employee hours worked


Since the denominator was lower, wages rose much faster than expected.  This month?  Average hours worked and wage gains were a mere +.1%, much more in line with the reality of the labor market.


For a deeper dive….

·       A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons is up .1% to 7.3%.

 

·       Prime age labor force participation rate (ages 25-54) was up .2% to 83.5%.  

 

·       The overall labor force participation was flat 62.5%.   This is still .7% below the level of February 2020.

 

·       In February, average hourly earnings for all employees on private nonfarm payrolls edged up by 5 cents to $34.57, following an increase of 18 cents in January. Average hourly earnings were up by 0.1 percent in February and 4.3 percent over the year.  In February, average hourly earnings of private-sector production and nonsupervisory employees edged up by 7 cents, or 0.2 percent, to $29.71.

 

·       In February, the average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.3 hours, following a decline of 0.2 hour in January. In manufacturing, the average workweek was little changed at 39.9 hours, and overtime increased by 0.2 hour to 3.0 hours in February. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.3 hour to 33.8 hours, following a decline of 0.3 hour in January.

 

·       APD is reported that 140,000 jobs were added last month.  Another big disparity with the BLS number.

 

Source: ADP, BLS, CNBC, Fox News

 

 

JOB OPENINGS AND LABOR TURNOVER – JANUARY 2024

 

The number of job openings changed little at 8.9 million on the last business day of January, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively. Within separations, quits (3.4 million) and layoffs and discharges (1.6 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class. This release also includes 2023 annual estimates for job openings, hires, and separations.

       

Job Openings

 

On the last business day of January, the number of job openings changed little at 8.9 million; this measure is down from a series high of 12.2 million in March 2022. Over the month, the rate was unchanged at 5.3 percent. In January, job openings increased in nondurable goods manufacturing (+82,000) but decreased in private educational services (-41,000).

 

Hires

 

In January, the number and rate of hires were little changed at 5.7 million and 3.6 percent, respectively. Hires decreased in state and local government education (-37,000).

 

Separations

 

Total separations include 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 include separations due to retirement, death, disability, and transfers to other locations of the same firm.

 

The number of total separations in January changed little at 5.3 million, and the rate was 3.4 percent for the third month in a row. Over the month, the number of total separations decreased in health care and social assistance (-86,000) and in federal government (-8,000).

 

In January, the number and rate of quits were little changed at 3.4 million and 2.1 percent, respectively. The number of quits increased in information (+23,000) but decreased in real estate and rental and leasing (-16,000).

 

In January, the number of layoffs and discharges changed little at 1.6 million, and the rate was 1.0 percent for the third month in a row. The number of layoffs and discharges decreased in state and local government education (-19,000) but increased in mining and logging (+7,000).

 

The number of other separations was little changed in January at 384,000.

 

Establishment Size Class

 

In January, establishments with 1 to 9 employees saw little change in their job openings rate, hires rate, and total separations rate. The job openings rate decreased for establishments with 5,000 or more employees.

 

December 2023 Revisions

 

The number of job openings for December was revised down by 137,000 to 8.9 million, the number of hires was revised up by 166,000 to 5.8 million, and the number of total separations was revised up by 54,000 to 5.4 million. Within separations, the number of quits was revised up by 47,000 to 3.4 million and the number of layoffs and discharges was revised down by 9,000 to 1.6 million. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. The annual benchmark process also contributes to the December revisions.)

 

Annual Levels and Rates

 

Consistent with BLS practice, annual estimates are published for not seasonally adjusted data each year with the January news release. For details about how these estimates are calculated, see the technical note.

 

In 2023, the annual average job openings level was 9.4 million, a decrease of 1.8 million from 2022. The annual average job openings rate was 5.7 percent in 2023, compared to 6.8 percent in 2022.

 

In 2023, the annual hires level was 71.0 million, a decrease of 5.8 million from 2022. Annual total separations decreased by 4.2 million in 2023 to 68.1 million. Annual quits decreased by 6.1 million in 2023 to 44.4 million and accounted for 65.2 percent of total separations. Annual layoffs and discharges increased by 2.1 million in 2023 to 19.8 million and accounted for 29.0 percent of total separations. Annual other separations decreased by 176,000 in 2023 to 3.9 million and accounted for 5.8 percent of total separations.

 

The annual average hires rate for 2023 was 3.8 percent, down from 4.2 percent in 2022. The annual average total separations rate for 2023 was 3.6 percent, compared to 3.9 percent in 2022. The annual average rates for the components of total separations were 2.4 percent for quits, 1.1 percent for layoffs and discharges, and 0.2 percent for other separations.

____________

The Job Openings and Labor Turnover Survey estimates for February 2024 are scheduled to be released on Tuesday, April 2, 2024, at 10:00 a.m. (ET).


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