Blockbuster March jobs report, but still a long way to go

Leading employment indicators of a slowdown or recessionI have been highlighting these throughout the pandemic because of their leading nature for the economy overall.  These were positive: 

• the average manufacturing workweek increased 0.2 hours to 40.5 hours. This is one of the 10 components of the LEI.

• Manufacturing jobs increased by 53,000. Since February 2020 manufacturing has still lost -515,000, or 4% of the total. Over 60% of the total loss of 10.6% has been regained.
• Construction jobs increased by 110,000 This was a big rebound from February’s Big Texas Freeze. Since February 2020 -182,000 construction jobs have been lost, 2.4% of the total. Over 80% of the worst loss of 12.5% has been regained.
• Residential construction jobs, which are even more leading, rose by 10,200. YoY there have been actual job gains, and employment in this sector is at another new 10 year+ high.

• temporary jobs *decreased* by -800. Since February 2020, 175,000 jobs have been lost, or 6% of all temporary help jobs.
• the number of people unemployed for 5 weeks or less decreased by -8,000 to 2.177 million, compared with last April’s total of 14.283 million.
• Professional and business employment rose by 66,000, which is still -685,000, or about 3.2% below its peak in February 2020.

Wages of non-managerial workers

• Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.2 to $25.21, which is a 4.4% YoY gain – less than the 5%+ YoY gains we saw in the last few months, which reflected that job losses during the pandemic  occurred primarily among lower wage earners.

Aggregate hours and wages:

• the index of aggregate hours worked for non-managerial workers increased by 1.6%, still a loss since February 2020 of about 5%.
•  the index of aggregate payrolls for non-managerial workers increased by 1.6%,  still a loss of -2.1% from February 2020. On the other hand, over 90% of the loss from last February to April has been made back up.

Other significant data:

• Full time jobs increased 935,000 in the household report.
• Part time jobs decreased -31,000 in the household report.
• The number of job holders who were part time for economic reasons decreased by 262,000 to 5.826 million, which is still an increase from February 2020 of 1,428,000.
• The Labor Force Participation Rate increased 0.1% to 61.5%, which is nevertheless down 1.8% from February 2020.
• The Employment to Population Ratio increased 0.2% to 57.8%, which is down 3.3% from February 2020.
• Leisure and hospitality employment increased 280,000.
• Employment in food and drinking jobs increased 176,000. 

SUMMARY
This was a blockbuster report, but one that was anticipated by the big declines in the weekly new jobless reports during the reference weeks for March. 
There were only two negative items: the number of temporary jobs actually declined slightly in March, and average hourly wages for non-supervisory personnel increased an anemic $0.02. There are silver linings in each. Former temporary jobs may be getting converted to permanent jobs; and lower wage service workers have been called back to work in large numbers.
Everything else was up sharply, reflecting an economy that is making substantial strides towards returning to pre-pandemic levels. This is partly because of great vaccination progress (for example, over half of all seniors in the US have been fully vaccinated), and partly a result of spring weather opening up great numbers of outdoor venues. I am particularly impressed that full-time employment was up sharply, while part time employment declined; and that temporary layoffs declined sharply, and permanent job losses declined as well. These were powerful moves in the right direction. Still, even at this rate, it will take the rest of the year to get back to February 2020 levels.