Economy adds 431K jobs in March, unemployment down to 3.6 percent

The U.S. added 431,000 jobs and the unemployment rate dropped to 3.6 percent in March, according to data released Friday by the Labor Department.

Job growth fell slightly short of expectations, as consensus estimates from economists projected a gain of roughly 490,000 jobs in March and a decline in the jobless rate to 3.7 percent.

But resilient consumer spending and historically strong demand for workers helped power the U.S. economy to another study job gain.

The Labor Department also revised the January and February job gains up by a combined 95,000, bringing the total of jobs added by the U.S. economy in 2022 up to 1,685,000 million.

More Americans who left the workforce during the pandemic appeared to be returning to the job hunt in March, a promising sign as businesses struggle to fill a record number of openings. The labor force participation rate ticked higher to 62.4 percent and the employment-population ratio—the proportion of working-age adults in the labor force—rose to 60.1 percent.

Wage growth also accelerated in March with average hourly earnings rising 5.6 percent over the past 12 months, up from 5.1 percent in February. 

The wage growth comes as inflation batters the Biden administration and Democrats politically, contributing to the president’s approval ratings being stuck in the low 40s. This has contributed to the anxiety in his party in a midterm election year, as Democrats are worried they could lose both the House and Senate majorities in this fall’s elections.

Gas prices have risen further with the Russian war in Ukraine and the international sanctions on Moscow. President Biden on Thursday announced he would be released 1 million barrels of oil a day from the nation’s strategic reserves to try to offer some help to lower gas prices.

The administration has touted the strength of the job market and the overall economy in the face of attacks from Republicans on inflation. And the March report offered more good news.

Overall, job-seekers continued to enjoy ample opportunities to find work at businesses across the economy even in the face of the highest annual inflation in 40 years. And businesses hit hardest by the pandemic-driven recession were among the top job-gainers in March.

The leisure and hospitality industry added 112,000 jobs in March, with restaurants and bars adding 61,000 jobs and accommodation businesses adding 25,000. Employment in the sector is still down 1.5 million from the onset of the pandemic.

Professional and business services companies gained 102,000 jobs in March and retailers added 49,000 employees, pushing both sectors well above their pre-pandemic employment levels.

The manufacturing, construction, and financial sectors also saw strong jobs gains last month.

The strong March job haul is the latest in a string of stellar employment reports. The U.S. has gained an average of 562,000 jobs each month in 2022—the same rate as in 2021, when the country added a record-breaking 6.8 million jobs

Even so, steady monthly job growth has done little to bolster Biden’s approval ratings and voters’ views about his handling of the economy. While job growth, consumer spending, the stock market and property values rebounded rapidly from the recession, a 7.9 percent annual increase in prices has wiped out the political benefit of a strong economy otherwise.

Will baby boomers unretire?

Economists are curious as to whether baby boomers who accelerated their retirement during the pandemic will return to the workforce, and if so, at what rate. 

About 2.6 million older workers retired above ordinary trends since the start of the pandemic two years ago, according to a Bloomberg report citing estimates from the Federal Reserve Bank of St. Louis. Despite this boom, applications for Social Security benefits have remained fairly flat, based on calculations by the Boston College Center for Retirement Research. About 0.1 percent of the U.S. population 55 and older have applied each month, which is in line with pre-pandemic applications.

Pandemic surges in stock and real estate values made this an “opportune time for some workers to step out of the labor force and stay out of the labor force,” Lowell Ricketts, data scientist for the Institute for Economic Equity at the St. Louis Fed, told Bloomberg. “But we’re still expecting a steady, steady trend that some might want to come back,” he noted, citing remote and hybrid work as attractors for seniors eyeing a return to the job market, particularly amid high inflation. 

Bureau of Labor Statistics data on labor participation shows that some baby boomers have come back, while many remain on the sidelines. Pre-pandemic, “unretirement” was not uncommon in the United States, due to financial hardship or personal choice. It’s still too soon to say whether the pandemic has challenged this dynamic.

Some “retirees” may have only one foot out the door, too. The Social Security Administration’s Office of the Chief Actuary suggested older people may have “retired” from one job and continued working in another, which explains why they haven’t applied for benefits, Bloomberg reports. 

Early retirements have stood to further disrupt the healthcare labor force throughout the pandemic. For instance, census microdata from the Current Population Survey provided by the University of Minnesota shows 14,500 nurses had recently retired as of March 2021, an increase of 140 percent over that figure in March 2019, according to a Pew report. The figure represents people who worked in the profession the past year but said they were now retired and not looking for work.

Read the Bloomberg report in full here

New jobless claims fall to 187,000, setting more than five-decade low

https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-march-19-2022-183206198.html

U.S. jobless claims set a more than 50-year low last week as the red-hot labor market shows few signs of cooling in the near-term.

The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial jobless claims, week ended March 19: 187,000 vs. 210,000 expected and a revised 215,000 during prior week
  • Continuing claims, week ended March 12: 1.350 million vs. 1.400 million expected and a revised 1.417 million during prior week

At 187,000, new jobless claims improved for a back-to-back week and reached the lowest level since September 1969. Continuing claims also fell further to reach 1.35 million — the least since January 1970.

The labor market has remained a point of strength in the U.S. economy, with job openings still elevated but coming down from record levels as more workers rejoin the labor force from the sidelines.

Going forward, however, some economists warned that new cases of the fast-spreading sub-variant of Omicron, known as BA.2, could at least temporarily disrupt mobility and economic activity across the country. As of this week, about one-third of COVID-19 cases in the U.S. have been attributed to the sub-variant, though overall new infections have still been trending down from January’s record high. The impact on the labor market — and on demand in the service sector especially — remains to be seen.

Right now, U.S. cases are in the sweet spot between the bottom of the initial Omicron wave and the impending explosion in BA.2 cases, but this probably won’t last long,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note this week. “Our bet … is that the coming BA.2 wave will trigger a modest but visible pull-back in the discretionary services sector, thereby dampening consumption in the first month of the second quarter.”

Still, many economists and policymakers have pointed out that the labor market withstood prior disruptions due to the Omicron wave earlier this year. Non-farm payrolls grew more than expected in each of January and February despite the outbreak.

And Federal Reserve Chair Jerome Powell reiterated his assessment of the labor market’s strength earlier this week, just days after calling the current job market “tight to an unhealthy level” in his post-Fed meeting press conference last week.

“The labor market has substantial momentum. Employment growth powered through the difficult Omicron wave, adding 1.75 million jobs over the past three months,” Powell said in a speech Monday. By many measures, the labor market is extremely tight, significantly tighter than the very strong job market just before the pandemic.”

The tightness of the labor market has also strongly informed the Fed’s decisions in pressing ahead with tightening monetary policy, with the economy showing clear signs of strength and the ability to handle less accommodative financial conditions. Last week, the Fed raised interest rates by 25 basis points in its first rate hike since 2018. And St. Louis Fed President Jim Bullard, the lone dissenter of that decision who had called for a more aggressive 50 basis point rate hike last week, justified his vote in part given the strength of the U.S. labor market even in the face of decades-high rates of inflation.

“U.S. labor markets are today already stronger than they have been in a generation,” Bullard said in a statement.

The winter jobs boom

It was a winter of surging job creation. Employers created jobs on a mass scale, Americans returned to the workforce, and the labor market shrugged off the Omicron variant and its broader pandemic funk.

  • That’s the takeaway from the February jobs report, which showed employers added 678,000 jobs last month. December and January job growth was better than previously thought, and the unemployment rate fell to 3.8%.

Why it matters: Yes, inflation is high as prices rose 7.5% over the last year as of January, and could rise higher as disruptions from the Ukraine war ripple through the economy.

  • But rising prices are coming amid an astonishingly rapid jobs boom.

Between the lines: The report shows the pandemic impact is fading. But some analysts warn not to expect this level of gains to continue as the crisis in Ukraine cuts into growth.

  • “The improvement in the American labor market is now very much a rearview mirror phenomenon,” economist Joe Brusuelas wrote in a research note.

One big surprise: Wage growth was essentially nonexistent, with average hourly earnings rising only a penny to $31.58.

  • That may reflect the nature of the jobs being added — disproportionately in the low-paying leisure and hospitality sector.
  • That is good news for those worried that rising wages and prices will drive further inflation. It is worse news for workers, whose average pay gain of 5.1% over the last year is far below inflation.

The share of adults in the labor force — which includes those looking for work — ticked up, as did the share of the population that’s actually employed. That suggests the robust job growth is pulling people back into the workforce, if gradually.

  • The labor force participation rate was 62.3% in February, more than a percentage point below its level two years ago, before the pandemic.

State of play: The Federal Reserve is set to begin an interest rate hiking campaign on March 16, amid high inflation and new geopolitical uncertainty from the Ukraine war. The new numbers are unlikely to change that one way or the other.

Labor Market Trends

January jobs report: Payrolls jump by 467,000 as unemployment rate rises to  4.0%

Good morning. Here’s Axios chief economic correspondent Neil Irwin and markets correspondent Emily Peck with what you need to know about today’s surprising jobs numbers.

After days of doom-and-gloom talk about how bad the January jobs numbers would be due to the Omicron variant, they turned out to be, um, great?

  • Employers added 467,000 jobs last month, despite millions out sick.

Why it matters: It’s rare for any jobs numbers to be stunning, but these were. They leave little doubt that this remains a tight job market in which employers are doing everything they can to hold on to their workers.

The big picture: Some of the biggest job gains were in categories that have strong seasonal patterns, normally adding workers in the fall and then cutting those temporary workers in January.

  • But employers, desperate for staff, appear to have held onto those workers in greater numbers than in a normal year.
  • Due to the statistical process of seasonal adjustment, “cutting fewer workers than usual for this time of year” gets translated as “adding lots of jobs.”

By the numbers: Leisure and hospitality added 151,000 jobs; retail added 61,000; and transportation and warehousing added 54,000.

Between the lines: The report offered more evidence that this is an exceptionally tight labor market with inflationary pressures brewing, giving the Federal Reserve the green light for interest rate increases.

  • Average hourly earnings rose a robust 0.7%, and are up 5.7% over the last year. Employers are being forced to pay up to fill their job openings.

Yes, but: Omicron really did have an effect. The report said 6 million people were unable to work because their employers were closed or lost business due to the pandemic, up from 3.1 million in December.

What they’re saying: “Had the prior relationship between Covid cases and employment held true, 800k daily new Covid cases would have led to 2.3 million job losses,” Julia Pollak, chief economist at ZipRecuiter, tweeted. “Instead, we saw 467,000 job GAINS!”

The bottom line: This is an incredibly strong labor market that is poised to strengthen further as Omicron fades.

U.S. added 467,000 jobs in January despite omicron variant surge

The U.S. economy added 467,000 jobs in January as the omicron variant spiked to record heights, with the labor market performing better than many expected two years after the pandemic began.

The unemployment rate ticked up slightly to 4 percent, from 3.9 percent the month before.

The monthly report, released by the Department of Labor, stems from a survey taken in mid-January, around the time the omicron variant was beginning to peak, with close to 1 million new confirmed cases each day. The rapid spread during that period upended many parts of the economy, closing schools, day cares, and a number of businesses, forcing parents to scramble.

But the labor market, according to the new data, performed very well during that stretch.

In addition to the robust January, the Department of Labor also revised upward the figure for December’s jobs report, to 510,000 from 199,000, and November, to 647,000 from 249,000. That means that there were some 700,000 more jobs added at the end of last year than previously estimated — showing a labor market with momentum heading into the new year.

The data sets show a labor market that continues to recover at a strong pace from the pandemic’s worst disruption in March and April of 2020.

New outbreaks and variants have sent shockwaves through the economy since then, but the labor market has continued to return, with companies working to add jobs and wages steadily rising.

The industries experiencing growth in January were lead by the leisure and hospitality sector, which added 151,000 jobs on the month, mostly in restaurants and bars. Professional and business services added 86,000 jobs. Retailers added 61,000 jobs in January, which is typically an off month. Transportation and warehousing added 54,000 jobs.

The labor market’s participation rate, a critical measurement that has never fully recovered from losses during the pandemic’s earliest days, also went up significantly, to 62.2 percent from 61.9 percent. That shows more people are reentering the labor force, looking for work.

Average hourly earnings increased by 23 cents on the month to $31.63, up 5.7 percent over the last year. However, those gains for many people have largely been wiped out by rising prices from inflation.

The data was collected during a tumultuous period. Nearly nine million workers were out sick around the time the survey was taken, and some of them could have been counted as unemployed based on the way the survey is conducted.

January is traditionally a weak month for employment when retail and other industries shed jobs after the holiday season. Economists say that seasonal adjustments made to the survey’s data to account for this have the potential to distort the survey in the other direction, given that the holiday shopping boom appeared to take place earlier this year than typical.

As such, predictions for job growth for the month had been all over the map. Analysts surveyed by Dow Jones predicted an average of about 150,000 jobs added for the month, in what would be the lowest amount added in a year. Some economists predicted job losses, of up to 400,000.

Last year was a strong year for growth in the labor market, with the country adding an average of more than 550,000 jobs a month — regaining some 6.5 million jobs lost in the pandemic’s earlier days, after the Department revised its numbers. The country has about 2.9 million fewer jobs than it had before the pandemic, according to the figures released Friday.

Omicron is going to make it look like things dropped off a cliff in January, but overall they did not,” said Drew Matus, chief market strategist for MetLife Investment Management.

Some economists like Matus say that the prospects for such rapid regrowth are more complicated this year, with the fiscal measures that boosted the economy during the pandemic’s first two years, like generous government aid, and record low interest rates from federal bankers, having largely expired, and the country’s confidence in a virus-free future dented after the winter wave.

Since the rollout of vaccines last year, there have been hopes that a return to a more typical rhythm of life could encourage some of the roughly two million people who have left the labor force during the pandemic to seek work anew, but thus far, continued threats from variants — and uncertainty after more closures of schools, daycares, and office — have prevented this from materializing in a substantial way.

There are signs that the omicron exacted a toll on the economy during its peak.

Weekly unemployment claims swelled mid-month to its highest level since October, though the numbers have come down in the two weeks since. Other statistical markers like passenger traffic at airports, hotel revenues, and dining reservations also took a hit during the month.

Recent months continue to be marked by incredible churn in the labor market, as record numbers of workers are switching jobs. In December, some 4.3 million people quit or changed jobs — a number which was down from an all-time high in November but still at elevated. Employers continue to report near record numbers of job openings: the Bureau of Labor Statistics said they reported some 10.9 million openings last month.

Jobless claims: Another 205,000 individuals filed new claims last week

https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-18-2021-232812196.html

New weekly jobless claims held below pre-pandemic levels last week, further underscoring still-solid demand for labor heading into the new year. 

The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial jobless claims, week ended Dec. 18: 205,000 vs. 205,000 expected and a downwardly revised 205,000 during prior week 
  • Continuing claims, week ended Dec. 11: 1.859 million vs. 1.835 million expected and an upwardly revised 1.867 million during prior week

This week’s new jobless claims report coincides with the survey week for the December monthly jobs report from the Labor Department, offering an early indication of the relative strength expected in that print due for release in early January. 

At 205,000, initial unemployment claims were expected to come in below even pre-pandemic levels yet again, with jobless claims having averaged around 220,000 per week throughout 2019. Earlier this month, first-time unemployment filings fell sharply to 188,000, or the lowest level since 1969. And based on the latest report, the four-week moving average for new claims was near its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250. 

Continuing claims have also come down sharply from pandemic-era highs, albeit while remaining slightly above the 2019 average of about 1.7 million. This metric, which counts the total number of individuals claiming benefits across regular state programs, came in below 2 million for a fourth straight week and reached the lowest level since March 2020.

“The claims data indicate strong demand for workers and a reluctance by businesses to lay off workers,” Rubeela Farooqi, chief economist for High Frequency Economics, wrote in a note. “However, disruptions around Omicron and Delta could be a headwind if businesses have to close for health-related reasons.”

“Overall, the direction in the labor market recovery remains positive, with demand still strong,” she added. “Labor shortages are persisting, preventing a stronger recovery, although these appeared to ease somewhat in November.” 

And indeed, policymakers have also taken note of the improving labor market situation. In a press conference last week, Federal Reserve Chair Jerome Powell maintained, “Amid improving labor market conditions and very strong demand for workers, the economy has been making rapid progress toward maximum employment.And at the close of the Federal Open Market Committee’s latest policy-setting meeting, officials decided to speed their rate of asset-purchase tapering, paring back some crisis-era support in the economy as the recovery progressed. 

Many Americans have also cited solid labor market conditions, especially as job openings hold at historically high levels. In the Conference Board’s latest Consumer Confidence report for December, 55.1% of consumers surveyed said jobs were “plentiful.” While this rate was down slightly from November’s 55.5%, it still represented a “historically strong reading,” according to the Conference Board. 

Jobless claims plunge to 199K, lowest level since 1969

https://thehill.com/policy/finance/582950-jobless-claims-plunge-to-199k-lowest-level-since-1969

For the 1st time during the pandemic, initial UI claims have dipped below pre-crisis levels, falling to 199,000 (vs the Feb 2020 avg: 211,700). Layoffs are hitting new lows amid ongoing labor shortages as employers look to hold onto hard-to-find workers.

New weekly claims for jobless aid plunged to the lowest level in more than 50 years last week, according to data released Wednesday by the Labor Department.

In the week ending Nov. 20, there were 199,000 initial applications for unemployment insurance, according to the seasonally adjusted figures, a decline of 71,000 from the previous week. Claims fell to the lowest level since November 1969 and are now well below the pre-pandemic trough of 225,000 applications received the week of March 14, 2020.

The steep drop in unemployment applications comes after several strong months of job growth and rising consumer spending heading into the holiday shopping season. While high inflation has stressed many household budgets, U.S. job growth, economic production, stock values and corporate profits have all steamed ahead.

“Getting new claims below the 200,000 level for the first time since the pandemic began is truly significant, portraying further improvement,” said Mark Hamrick, chief economic analyst at Bankrate.com.

“The strains associated with higher prices, shortages of supplies and available job candidates are weighed against low levels of layoffs, wage gains and a falling unemployment rate,” he continued. “Growth will likely be above par for the foreseeable future, but within the context of historically high inflation which should relax its grip on the economy to some degree in the year ahead.”

The U.S. added 531,000 jobs in October and job growth in the previous months was revised substantially higher after a string of what first appeared to be meager gains. While businesses have struggled to hire enough workers to meet surging consumer demand, the decline in jobless claims appears to be a sign of an improving labor market.

“Layoffs are hitting new lows amid ongoing labor shortages as employers look to hold onto hard-to-find workers,” said Daniel Zhao, senior economist at Glassdoor, in a Wednesday thread on Twitter.

Even so, Zhao said the sharp decline below pre-pandemic levels may have been due to a lower than expected seasonal impact on hiring.

“As you can see from the above chart, this is in part due to the seasonal adjustment expecting a much larger jump in non-seasonally adjusted claims, so this dip below pre-crisis levels may be short-lived,” he explained.

U.S. economy adds 531,000 jobs in huge hiring rebound

U.S. economy adds 531,000 jobs in huge hiring rebound

The job market added a stunning 531,000 jobs last month. The unemployment rate ticked down to 4.6% — a new pandemic-era low.

Why it matters: America’s job market recovery has been on track all along.

Between the lines: Revisions to prior months are often overlooked. Not this month: Upgrades to both August and September were so enormous — fully 366,000 jobs higher than originally reported — that they have definitively reversed the narrative that there was a Delta-induced hiring slump in late summer.

By the numbers: America has now recovered 80% of the jobs lost at the depth of the recession in 2020.

The big picture: Leisure and hospitality added 164,000 jobs last month — but jobs growth was widespread. The disappointment — again — came in public sector education. State and local education shed a combined 65,000 jobs.

  • Wages are still rising: Average hourly earnings rose another 11 cents an hour in October, to $30.96. That’s enough to keep up with inflation.

What to watch: Millions of workers remain on the sidelines — and there wasn’t much improvement in pulling them back into the workforce.

The bottom line: “The Fall hiccup is now at best a Fall deep breath,” tweeted University of Michigan economist Justin Wolfers.