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DE | Sinai Economic and Market Perspectives | Spring Has Sprung! – 04/03/21
Spring Has Sprung!
March Labor Market Hugely Strong
The March Employment Report was stronger-than-strong, across-the-board—in Jobs (916,000; 780,000 Private Sector, DE Estimated 725,000, Consensus 600,000 plus); Persons who found work (609,000, DE 625,000); the Unemployment Rate (down to 6% from 6.2%; DE pre- at 6% or 5.9%, Consensus 6%); wage inflation down 0.1%; the Labor Force up 325,000, Labor Force Participation Rate (LFPR) at 61.5 from 61.4 and Employment-Population Ratio at 57.8, up from 57.6.
These results reflect a lot of positives—1) Reopenings, 2) unleashing of Pentup Demands; 3) still extremely low interest rates; 4) the cumulative effects of nearly $6 trillion of unprecedented fiscal stimulus; 5) increased optimism for Households and Business; 6) and early Easter and Passover.
The Jobs gains (Nonfarm Payroll) were widespread, across-the-board, with the biggest increases in Leisure and Hospitality (280,000), Construction (110,000), Government-Education (76,000), Trade and Transfer (72,000), Professional Business Services (66,000).
The decline in the Unemployment Rate came from increased Labor Supply (325,000) and Persons finding work (609,000), both signs of labor market strength. Because of so much slack in the labor market, wage inflation fell 0.1% MoM, underscoring the huge declines in labor costs that have occurred over the past year.
Previous months, March and February showed sizable upward revisions.
Since the peak in Jobs and Persons working last February, the net decline is 8.4 million for the former, and the latter, 7.9 million. The net decline in the Labor Force is 3.9 million. Thus, the “Army of Unemployed” remains quite high, at 11.8 million.
There has been, and is, a lot of Hiring, vastly speeded up in March but also a lot of Not Hiring with still a huge supply of labor, apparently holding down wage inflation.