In Like A Lion - March Jobs

by: Max Fraad Wolff

March Non-farm payrolls increased by 88,000, approximately half of the 169,000 monthly job growth average for 2013. This was a disappointing number on its own merits and is further underwhelming because we saw a major dropout of our labor force. March 2013 saw a large number of people, part-timers particularly, drop out of working or looking for work. It appears that difficulties with federal, state, local budgets and hiring are having a broad, negative impact.

We continue to see narrow headline unemployment turn in decent performance. The narrow U3 unemployment rate has fallen nicely over the last 3 years. Even the broad and more valuable measure, U6, has declined. The broad measure includes involuntary part-time workers and those who are discouraged. This measure is essential as many have given up on formal sector employment and our labor force has been shrinking. The below two graphs show these trends.

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Federal and local payrolls declined again in March. The public sector shrank employment by 7,000 across the month of March. This was lead by federal employment, which declined by 14,000, mostly from large reductions at the U.S. Post Office. State employment was up and local employment edged down by 2,000. Lower head counts in the public sector also mean losses in local services that are likely to have their largest effects on more vulnerable populations.

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Wage growth continues to be non-existent. Hourly earnings are not keeping up with rising prices. I feel a little like a broken record here. However, this remains the unspoken truth of the Great Recession. The majority is working. They are working for less, adjusted for inflation, than they were when the recession began. This continues to put brakes on a weak recovery and is coloring the public perception of economic performance. Our "recoveries" will not be robust or broadly experienced until or unless this changes.

In March, average hourly earnings for all employees on private nonfarm payrolls, at $23.82, changed little (+1 cent). Over the year, average hourly earnings have risen by 42 cents, or 1.8 percent. Average hourly earnings of private-sector production and nonsupervisory employees, at $20.03, changed little (-1 cent) in March. BLS Employment Situation Summary

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