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Comments on February Employment Report

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by Calculated Risk on 3/04/2022 09:31:00 AM

This was a strong report with upward revisions to prior months.

The headline jobs number in the February employment report was above expectations, and employment for the previous two months was revised up by 92,000. The participation rate and the employment-population ratio both increased, and the unemployment rate decreased to 3.8%.

Leisure and hospitality gained 179 thousand jobs in February. In March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.53 million jobs since February 2020. So, leisure and hospitality has now added back about 81% all of the jobs lost in March and April 2020.
Construction employment increased 60 thousand and is now only 11 thousand below the pre-pandemic level.
Manufacturing added 36 thousand jobs and is still 178 thousand below the pre-pandemic level.
Earlier: February Employment Report: 678 thousand Jobs, 3.8% Unemployment Rate

In February, the year-over-year employment change was 6.67 million jobs.

Permanent Job Losers

Click on graph for larger image.

This graph shows permanent job losers as a percent of the pre-recession peak in employment through the report today.

This data is only available back to 1994, so there is only data for three recessions.

In February, the number of permanent job losers decreased to 1.583 million from 1.630 million in the previous month.

These jobs will likely be the hardest to recover, so it is a positive that the number of permanent job losers is declining fairly rapidly.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The prime working age will be key as the economy recovers.

The 25 to 54 participation rate increased in February to 82.2% from 82.0% in January, and the 25 to 54 employment population ratio increased to 79.5% from 79.1% the previous month.

Both are still below the pre-pandemic levels and indicate that some prime workers have still not returned to the labor force.

Part Time for Economic Reasons

From the BLS report:

“The number of persons employed part time for economic reasons increased by 418,000 to
4.1 million in February but remains below its February 2020 level of 4.4 million. 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 working part time for economic reasons increased in February to 4.135 million from 3.717 million in January. This is lower than pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.2% from 7.1% in the previous month. This is down from the record high in April 22.9% for this measure since 1994. This measure was at 7.0% in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.702 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.691 million the previous month.

This does not include all the people that left the labor force.

Summary:

The headline monthly jobs number was above expectations; and the previous two months were revised up by 92,000 combined.

The headline unemployment rate decreased to 3.8%. The household survey indicated a solid gain in employment of 548 thousand, following a gain of 1.2 million last month.
Both the prime age participation rate and employment-population ratio increased, but still below pre-pandemic levels, indicating some prime workers are still out of the labor force. And there are still 2.1 million fewer jobs than prior to the recession.
Overall, this was another strong report.

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