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Headline Jobs Number For March Is Misleading. Growth Mostly In Low-Wage And Government Sectors

J.G. Collins profile picture
J.G. Collins


  • Leisure & Hospitality (280,000), Government (136,000), and Education & Health Services (101,000), which tend to be government supported, were 517,000 of the 916,000 jobs.
  • The rise of COVID19 cases and the confirmation of the Brazilian variant in Michigan last week gives us pause as to whether we are truly seeing daylight on the disease.
  • We expect tensions with CCP China to escalate after the summit in Alaska last month and the crackdown on Honk Kong democracy.

Sign text closeup for help wanted with red and white colors by entrance to store shop business building during corona virus covid 19 pandemic
Photo by ablokhin/iStock via Getty Images

NEW YORK (April 2) - The March jobs report printed this morning with 916,000 jobs, well above the consensus estimate of 647,000 jobs that the markets expected. (Today is Good Friday, so markets are closed.)

This article was written by

J.G. Collins profile picture
Before establishing The Stuyvesant Square Consultancy, J.G. Collins spent some 30 years building a career in executive and consulting financial roles, with a particular emphasis in business taxation. His experience spans work for Fortune 100 companies, one of the former “Big Eight” international accounting firms, and client service for large middle-market public accounting firms. He has advised domestic and foreign clients in the tax-efficient structuring of legal entities, effective tax rate planning, mergers and acquisitions, corporate reorganizations, treasury operations, financial instruments, international taxation, tax accounting under GAAP, state and local taxation, and sales and miscellaneous taxes. He has managed countless federal and state tax audits to successful resolutions for clients. His experience spans a diverse array of industries, including private equity, motion pictures and music entertainment, fashion, real estate, publishing, technology development, retail, and oil and gas. Mr. Collins conceived and branded the specialty industry entertainment practice of one of the nation’s leading accounting firms and oversaw the business tax marketing program for business enterprises of another large regional firm. Mr. Collins’ marketing collateral and published articles have been extraordinarily well received because of his ability to present intricate and complex aspects of tax, business, policy, and politics in clear, concise, easily understandable prose devoid of jargon and irrelevant detail. An astute, data-driven observer of business, politics and economics, Mr. Collins has advised political candidates and public officials on campaign, political and policy matters for more than two decades, and has twice been a delegate to his political party’s national quadrennial convention to nominate the American president. His expertise as a champion debater and orator in his student days, along with his savvy marketing expertise, has allowed Mr. Collins to coach private and public sector executives and candidates on public speaking, speech writing, message development and successful business presentations. Campaign collateral he developed for political campaigns has been used in university courses as an “excellent example of persuasive campaign advertising”. Mr. Collins holds degrees in Economics and Accounting from the Stern School of Business, New York University. His elective coursework included a number of political science courses, including International Politics, International Organizations, European Politics and other more basic political science courses.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The views expressed, including the outcome of future events, are the opinions of the firm and its management only as of April 2,, 2021, and will not be revised for events after this document was submitted to Seeking Alpha editors for publication. Statements herein do not represent, and should not be considered to be, investment advice. You should not use this article for that purpose. This article includes forward looking statements as to future events that may or may not develop as the writer opines. Before making any investment decision you should consult your own investment, business, legal, tax, and financial advisers. We associate with principals of Technometrica on survey work in some elements of our business.

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Comments (12)

With the recent Bill they are mentioning Growth will continue Low Wage and Government Sectors. Kindergarten and preschool teachers will be in high demand with the child care bills. What is this $6 Trillion in Bills in the first 100 Days?
Convoluted profile picture
Ok-I noticed that you make a distinction between financials and the large commercial banks. Do you include regional banks within ‘financials’?
Thank you for analyzing the details behind the job numbers and other data. This is info you won't find the so-called legacy media doing, especially with a Democrat administration in control. They don't want to highlight the negatives. But it was ok for them to do it over the last 4 years.
Well Done - Thanks.

Can anyone , esp. when considering history, think that there might be elements, groups , movements, and parties that one would be ill advised to "unite with".

Judgment must be primary in all cases, and many times, not uniting with irrational and/or predatory entities is the best thing one can do.
My edit: Added word "be".
Many states have passed min wage laws which in fact distinctly make many of these jobs now not that low wage anymore. Leisure & hospitality included and especially. Another round of jobs that are distinctly not low wage: construction. Along with lumber, the trades like your plumber have become one of the most precious labor pools one must pay up for nowadays. And even if restaurants workers are “low wage”, they have a high propensity to spend, which make them invaluable in restarting and reflating the economy, which now more than ever need higher spend velocity which the top 10% are wont to not do, instead hoarding & jacking up the savings rate to record levels. Bottom 50% of the economic strata don’t have that luxury, living hand to mouth
J.G. Collins profile picture
@Ted Hu The reason we developed our exclusive jobs creation by average weekly wages chart is to show which sector created jobs and how much they pay at a glance. As you can see, Leisure & Hospitality workers are paid, on average, $437/week, pre-tax. That's not very high wage, even with minimum wage laws. And, as you do the math, assuming a $15 minimum wage, you can see that most of those jobs are, at best, part-time. Even a $600 weekly wage at $15/hour and a 40-hour week is not that much. FICA and unemployment insurance claims almost $50 of that. Commuting, on-site meals (assuming they're not comped) takes up $10 to $15 a day. It's not much.

We do month-to-month comparisons on jobs and, as you can see, February and March construction jobs average out to about 50,000 new jobs. But still better than the same period last year. seekingalpha.com/...

One of the reasons we're concerned about the outlook for the economy coming out of the pandemic is that we think it obfuscated other cracks in the economy, as you can see from the tone of that piece.
Convoluted profile picture
What’s the quantifiable difference in a “U” vs a “V”?

It seems to be more of a timing distinction.

Your assessment seems logical, though. But, I see visitors all over Florida. Roads and restaurants are jammed. Driving up from Florida to Atlanta this week, I was amazed at the volume of traffic. I also noticed a lot of new autos/trucks.

In terms of employment, there is a shortage of workers. Various reports refer to increased savings. It almost seems as if the pandemic made people wealthier-at least according to some of the more optimistic analysts.

What explains the disparity in economic assessment?
J.G. Collins profile picture
@Convoluted A "U" versus a "V" is, indeed, a matter of timing. A "U" generally takes 2 years or more; a "V" is less than 2 years.

I live and work in Manhattan. Our economy is shuttered tight as a drum with rising levels of pandemic infection.

The professional "work from home" class did, indeed, horde cash during the pandemic: no commuting expense, no dry cleaning; no morning coffee or sandwich shop lunches. But many also lost jobs or had a spouse have to quit work to be with children who weren't at school.

So if you drew a paycheck and had a spouse who could continue to do the same, I suspect you did OK. But that was not the case for a good portion of the economy who worked in customer-facing business or manufacturing.
Convoluted profile picture
@J.G. Collins

So, there are a few people left in Manhattan. Too many moving to Florida.

Your comment about financials is interesting. It seems fashionable to push banks. Personally, I don’t see the nexus between slightly higher rates and greatly enhanced profitability.

You listed financials as ‘underperform’ but what is the basis of your opinion. It does appear that the financials have cooled a bit over the past few days. Is there another leg higher, or has the market engaged in sober reflection?

J.G. Collins profile picture
@Convoluted Mostly on defaults, mortgage and otherwise. With moratoriums on foreclosures and evictions, we expect to see foreclosures. The Fed made them build up their reserves and ended stock buy-backs. .
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