Employment situation for March 2013

http://mam.econoday.com/byshoweventfull.asp?fid=456022&cust=mam&year=2013&lid=0

Employment Situation

Released On 4/5/2013 8:30:00 AM For Mar, 2013 Prior Prior Revised Consensus Consensus Range Actual Nonfarm Payrolls - M/M change 236,000  268,000  193,000  170,000  to 230,000  88,000  Unemployment Rate - Level 7.7 % 7.7 % 7.6 % to 7.8 % 7.6 % Average Hourly Earnings - M/M change 0.2 % 0.1 % 0.2 % 0.1 % to 0.2 % 0.0 % Av Workweek - All Employees 34.5 hrs 34.5 hrs 34.4 hrs to 34.6 hrs 34.6 hrs Private Payrolls - M/M change 246,000  254,000  200,000  175,000  to 240,000  95,000

Highlights Today's employment report was very disappointing even though the unemployment rate eased-for the wrong reason. Total payroll jobs rose a meager 88,000 after gaining 268,000 in February (originally up 236,000). Analysts forecast a 193,000 rise for March. The net revisions for January and February were up 61,000. The unemployment rate edged down to 7.6 percent in March from 7.7 percent the prior month. The consensus projected a 7.7 percent unemployment rate. The decline was due to a drop in the labor force. Turning back to payroll data, private payrolls increased 95,000 after rising 254,000 in February (originally 246,000). Expectations were for a 200,000 gain. In the private sector, relative strength was service-providing sectors-which were still soft. Service-providing jobs increased 79,000 after a 181,000 rise in February. The March rise was led by subcomponents for healthcare, up 23,400; temporary help, up 20,300; and leisure, up 17,000. The impact of higher payroll taxes finally may be kicking in as retail jobs fell 24,100. Goods-producing jobs rose 16,000 after a 73,000 jump in February. Construction advanced 18,000 in the latest month with mining edging up 1,000. Manufacturing employment slipped 3,000. Government jobs declined 7,000 in March, following an increase of 14,000 the month before. Earnings were dead in the water. Average hourly earnings were flat in March, following a modest improvement of 0.1 percent for February. Analysts called for a 0.2 percent gain. The average workweek edged up to 34.6 hours in March from 34.5 hours the prior month. The market consensus was for 34.5 hours. Turning to detail for the household survey, household employment in March fell 206,000 after a 170,000 gain the month before. The labor force dropped even faster, down 496,000 after a 130,000 dip in February. Today's report can only be described as dismal despite the dip in the unemployment rate. The sharp deceleration in hiring will keep Fed policy loose even though the unemployment rate is now part of its policy guidance. The Fed has clarified that it is looking at a broad range of labor market measures and outside of the unemployment rate, other measures showed little progress. And the Fed will know that the unemployment rate slipped for the wrong reason-more discouraged workers. On the news, equity futures declined significantly.

Market Consensus before announcement Nonfarm payroll employment was much stronger than expected in February. They posted a gain of 236,000, following an increase of 119,000 in January and an increase of 219,000 in December. The unemployment rate declined to 7.7 percent from 7.9 percent in January. Private payrolls advanced 246,000 in February, following a boost of 140,000 in January. In the private sector, strength was seen in both goods-producing and service-providing sectors but led by the latter. Service-providing jobs increased 179,000 after a 99,000 rise in January. Goods-producing jobs jumped 67,000 after a 41,000 gain in January. Government jobs declined 10,000 in February, following a drop of 21,000 the month before. Earnings have been oscillating but upward. Average hourly earnings increased 0.2 percent in February, following a gain of 0.1 percent January. The average workweek edged up to 34.5 hours in February from 34.4 hours the month before.

Definition The employment situation is a set of labor market indicators based on two separate surveys in this one report. Based on the Household Survey, the unemployment rate measures the number of unemployed as a percentage of the labor force. Other key series come from the Establishment Survey (of business establishments). Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls.  Why Investors Care

During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month. Data Source: Haver Analytics

The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy. Data Source: Haver Analytics