The US in March added 916K non-farm payrolls jobs more than forecasted 639,000 new jobs. Unemployment is recovering after the Coronavirus hit the economy as people return to work. The unemployment rate fell to 6.0%, however 8.4 million jobs short of the peak in February of 2020.
The US in March added 916K non-farm payrolls jobs more than forecasted 639,000 new jobs. Unemployment is recovering after the Coronavirus hit the economy as people return to work. The unemployment rate fell to 6.0%, however 8.4 million jobs short of the peak in February of 2020
March 2021 U.S. Employment Report
The Covid-19 virus has wreaked havoc on the global economy. The world’s economy was shut down and much of America has stay at home orders. Jobless claims numbers have been records and unfortunately the story is much worse as people have not all been able to return to work. The May through November reports however were a surprise gain in jobs. The expectation had been for more recovery in job losses for December until new lockdowns came into affect and we saw a loss of 140,000 jobs. We rebounded Jan somewhat with 49,000 new jobs and an upwardly revised 468K in February. The US economy added 916K jobs in March of 2021, the strongest employment growth in 7 months, with the largest gains occurring in leisure and hospitality, public and private education, and construction.
The market had expected the February report released Friday to show nonfarm payrolls rise 639,000 new jobs which it beat handidly with 916,000 new jobs with the recovering economy. The ADP report this week showed Private businesses in the US hired 517K workers in March of 2021, compared to market forecasts of 550K. It is the highest increase in private payrolls in 6 months. December had seen the first decline in private-sector employment since April, amid a rise in COVID-19 infections and further lockdowns. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 7.9%.
March 2021 US Employment Report & Expectations
- Non-farm payrolls +916,000 vs +639,000 expected, Prior +379,000 (revised to 468,000)
- Unemployment rate 6.0% v 6.0% expected prior 6.2%
- Participation rate 61.5% vs 61.5% exp 61.4% prior (63.3% highest since 2014)
- Underemployment rate 10.7% vs 11.1% Exp 11.1% prior
- Two month net revision +156 Prior -159 k +11k +15k, +145k
- Manufacturing payrolls +53k vs +33k exp +21k prior
- Private payrolls +780 vs +200 exp +465 prior
- Long-term unemployed 4.2m vs 4.1m prior
- The employment-population ratio 57.8% vs 57.6% prior
- Average hourly earnings -0.1% m/m v 0.1% Expected +0.3% m/m Prior
- Average hourly earnings 4.2% y/y v 4.5% Prior 4.4% Expected
- Average weekly hours 34.9 v 34.7 Expected/Prior”
US saw first decrease in average hourly #earnings since June last year despite the big gain in jobs .for all employees on US private nonfarm payrolls – Average hourly earnings fell 4 cents to $29.96 or -0.1% m/m v 0.1% Expected +0.3% m/m Prior
Bond Market Reaction to Jobs Report
The yield on the benchmark 10-year Treasury note edged up to 1.70% on Friday in thin holiday trade with only the bond market open for a small period. Equity indices were open until globex close and rose around 7 S&P 500 handles on the report.
The 10 year yield remained below a fresh 14-month high of 1.78% hit early in the week. Meanwhile, investors continue to digest President Biden’s new infrastructure plan worth $2.25 trillion which will likely face strong GOP opposition as it will be funded by higher corporate taxes. The bond market appears to be stabilizing after a rally that started in August 2020 and intensified from January as coronavirus vaccination and further fiscal stimulus support prospects of a strong economic recovery but could also lead to a spike in inflation and debt levels. In the first quarter of 2021, the 10-year yield went up 83 basis points, the strongest increase in over a decade.
Household Survey Data
The unemployment rate edged down to 6.0 percent in March. The rate is down considerably from its recent high in April 2020 but is 2.5 percentage points higher than its pre-pandemic level in February 2020. The number of unemployed persons, at 9.7 million, continued to trend down in March but is 4.0 million higher than in February 2020.
Among the major worker groups, the unemployment rate for Asians rose to 6.0 percent in March, following a decline in the previous month. The jobless rate for Hispanics edged down to 7.9 percent over the month, while the rates for adult men (5.8 percent), adult women (5.7 percent), teenagers (13.0 percent), Whites (5.4 percent), and Blacks (9.6 percent) changed little.
Among the unemployed, the number of persons on temporary layoff declined by 203,000 in March to 2.0 million. This measure is down considerably from the recent high of 18.0 million in April 2020 but is 1.3 million higher than in February 2020.
The number of permanent job losers, at 3.4 million, was little changed in March but is 2.1 million higher than February 2020
The number of long-term unemployed (those jobless for 27 weeks or more), at 4.2 million, changed little over the month but is up by 3.1 million since February 2020. In March, these long-term unemployed accounted for 43.4 percent of the total unemployed. The number of persons jobless 5 to 14 weeks declined by 313,000 to 1.9 million. The number of persons jobless less than 5 weeks, at 2.2 million, was essentially unchanged over the month.
The labor force participation rate changed little at 61.5 percent in March. This measure is 1.8 percentage points lower than in February 2020. The employment-population ratio, at 57.8 percent, was up by 0.2 percentage point over the month but is 3.3 percentage points lower than in February 2020.
The number of persons employed part time for economic reasons, at 5.8 million, changed little in March but is 1.4 million higher than in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.
The number of persons not in the labor force who currently want a job was about unchanged at 6.9 million in March but is up by 1.8 million since February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 1.9 million, was essentially unchanged in March but is up by 416,000 since February 2020. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 523,000 in March, essentially unchanged from the previous month.
Household Survey Supplemental Data
In March, 21.0 percent of employed persons teleworked because of the coronavirus pandemic, down from 22.7 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.-
In March, 11.4 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is down from 13.3 million in the previous month. Among those who reported in March that they were unable to work because of pandemic-related closures or lost business, 10.2 percent received at least some pay from their employer for the hours not worked, little changed from the previous month.
Among those not in the labor force in March, 3.7 million persons were prevented from looking for work due to the pandemic. This measure is down from 4.2 million the month before. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.) These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm
Establishment Survey Data
Total nonfarm payroll employment increased by 916,000 in March but is down by 8.4 million, or 5.5 percent, from its pre-pandemic peak in February 2020. Job growth in March was widespread, with the largest gains occurring in leisure and hospitality, public and private education, and construction.
In March, employment in leisure and hospitality increased by 280,000, as pandemic-related restrictions eased in many parts of the country. Nearly two-thirds of the increase was in food services and drinking places (+176,000). Job gains also occurred in arts, entertainment, and recreation (+64,000) and in accommodation (+40,000). Employment in leisure and hospitality is down by 3.1 million, or 18.5 percent, since February 2020.
In March, employment increased in both public and private education, reflecting the continued resumption of in-person learning and other school-related activities in many parts of the country. Employment rose by 76,000 in local government education, by 50,000 in state government education, and by 64,000 in private education.
Employment is down from February 2020 in local government education (-594,000), state government education (-270,000), and private education (-310,000). Construction added 110,000 jobs in March, following job losses in the previous month (-56,000) that were likely weather-related. Employment growth in the industry was widespread in March, with gains of 65,000 in specialty trade contractors, 27,000 in heavy and civil engineering construction, and 18,000 in construction of buildings.
Employment in construction is 182,000 below its February 2020 level. Employment in professional and business services rose by 66,000 over the month but is down by 685,000 since February 2020. In March, employment in administrative and support services continued to trend up (+37,000), although employment in its temporary help services component was essentially unchanged. Employment also continued on an upward trend in management and technical consulting services (+8,000) and in computer systems design and related services (+6,000).
Manufacturing employment rose by 53,000 in March, with job gains occurring in both durable goods (+30,000) and nondurable goods (+23,000). Employment in manufacturing is down by 515,000 since February 2020. Transportation and warehousing added 48,000 jobs in March. Employment increased in couriers and messengers (+17,000), transit and ground passenger transportation (+13,000), support activities for transportation (+6,000), and air transportation (+6,000). Since February 2020, employment in couriers and messengers is up by 206,000 (or 23.3 percent), while employment is down by 112,000 (or 22.8 percent) in transit and ground passenger transportation and by 104,000 (or 20.1 percent) in air transportation.
Employment in the other services industry increased by 42,000 over the month, reflecting job gains in personal and laundry services (+19,000) and in repair and maintenance (+18,000). Employment in other services is down by 396,000 since February 2020. Social assistance added 25,000 jobs in March, mostly in individual and family services (+20,000). Employment in social assistance is 306,000 lower than in February 2020. Employment in wholesale trade increased by 24,000 in March, with job gains in both durable goods (+14,000) and nondurable goods (+10,000).
Employment in wholesale trade is 234,000 lower than in February 2020. Retail trade added 23,000 jobs in March. Job growth in clothing and clothing accessories stores (+16,000), motor vehicle and parts dealers (+13,000), and furniture and home furnishing stores (+6,000) was partially offset by losses in building material and garden supply stores (-9,000) and general merchandise stores (-7,000). Employment in retail trade is 381,000 below its February 2020 level.
Employment in mining rose by 21,000 in March, largely in support activities for mining (+19,000). Mining employment is down by 130,000 since a peak in January 2019. Financial activities added 16,000 jobs in March. Job gains in insurance carriers and related activities (+11,000) and real estate (+10,000) more than offset losses in credit intermediation and related activities (-7,000). Financial activities has 87,000 fewer jobs than in February 2020. Employment in health care and information changed little in March.
In March, average hourly earnings for all employees on private nonfarm payrolls fell by 4 cents to $29.96. Average hourly earnings for private-sector production and nonsupervisory employees, at $25.21, changed little (+2 cents).
The large employment fluctuations over the past year—especially in industries with lower-paid workers—complicate the analysis of recent trends in average hourly earnings. (See tables B-3 and B-8.) The average workweek for all employees on private nonfarm payrolls increased by 0.3 hour to 34.9 hours in March, following a decline of 0.4 hour in the prior month. In manufacturing, the workweek increased by 0.2 hour to 40.5 hours over the month, and overtime increased by 0.1 hour to 3.3 hours.
The average workweek for production and nonsupervisory employees on private nonfarm payrolls rose by 0.3 hour to 34.3 hours.
The change in total nonfarm payroll employment for January was revised up by 67,000, from +166,000 to +233,000, and the change for February was revised up by 89,000, from +379,000 to +468,000. With these revisions, employment in January and February combined was 156,000 higher than previously reported. (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 Employment Situation for April is scheduled to be released on Friday, May 7, 2021, at 8:30 a.m. (ET).
March 2021 ADP U.S. Employment Report
The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic.
Private businesses in the US hired 517K workers in March of 2021, compared to market forecasts of 550K. It is the highest increase in private payrolls in 6 months.
The service-providing sector created 437K jobs led by leisure and hospitality (169K); trade, transportation & utilities (92K); professional and business (83K); education and health (68K); other services (22K); and financial activities (9K) while the information sector lost 7K jobs.
The goods-producing sector rebounded and added 80K jobs, due to manufacturing (49K) and construction (32K) while natural resources and mining shed 1K jobs. Private payrolls in midsized companies were up by 188K, small firms by 174K and large companies by 155K.
Source: Automatic Data Processing, Inc
Jobless Claims for the week ending March 27 2021
- The number of Americans filing for unemployment benefits rose to 719 thousand in the week ended March 27th, from last week’s 658 thousand and above market expectations of 680 thousand.
- Claims remained close to their lowest level in a year, as more businesses reopened thanks to the vaccine rollout programme and the government’s massive $1.9 trillion pandemic relief package.
- The 4-week moving average, which removes week-to-week volatility, declined also to 719 thousand, the lowest since March 2020.
- On a non-seasonally adjusted basis, initial claims were up to 714 thousand, from 651 thousand in the previous week, led by larger increases in the states of Virginia, Georgia and Kentucky.
- The number of Americans applying for help from the Pandemic Unemployment Assistance scheme, which covers workers that do not qualify for initial claims, fell to 237 thousand in the week ended March 27th, from the previous week’s revised level of 241 thousand.
Challenger, Gray & Christmas March Job Cuts Report
- US March Challenger layoffs 30,603 vs 34,351 prior
- Job cuts announced by US-based companies tumbled 86 percent year-on-year to a 33-month low of 30,603 in March 2021, from the 222,288 job cuts announced in the same month last year, when first wave of layoffs occurred due to the pandemic and subsequent lockdowns.
- March’s total was also 11 percent lower than the 34,531 cuts announced in February.
- Job cuts were led by companies in the aerospace/defense industry, which has announced 31,073 cuts in March, followed by telecommunications with 24,157 cuts and retail with 11,932 cuts.
- Through the first quarter, 144,686 job cuts have been announced, 58 percent lower than the 346,683 announced in the first quarter of 2020.
- Source: Challenger, Gray and Christmas, Inc.
From The TraderCommunity Research Desk