Tomorrow the BLS will release the official jobs report for March 2013, so once again we look to ADP and Gallup for predictive indicators. ADP, which uses its extensive payroll-service data to estimate job growth in the private sector, usually comes in higher than the BLS, and that may mean a relatively poor report tomorrow, as ADP estimated growth of only 158,000 jobs last month — barely keeping pace with population growth:
Private sector employment increased by 158,000 jobs from February to March, according to the March ADP National Employment Report®, which is produced by ADP® , a leading provider of human capital management solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. Revisions to job gains in the two prior months were offsetting; February’s gain of 198,000 jobs was revised up by 39,000 to 237,000, and January’s 215,000 gain was revised down by 38,000 to 177,000. …
Goods-producing employment rose by 7,000 jobs in March, its slowest pace of growth in six months. Construction added no net jobs over the month; this follows average monthly gains of 29,000 in the three months prior. Meanwhile, manufacturers added 6,000 jobs.
Service-providing jobs increased by 151,000. Among the service industries reported by the ADP National Employment Report, professional/business services had the largest gain with 39,000 jobs added over the month. Trade/transportation/utilities added 22,000 jobs and financial activities added 9,000 jobs.
In other words, the changes to their January and February reports canceled out. Normally, we’d apply an overshoot factor somewhere between 60% and 80% to ADP’s numbers in order to estimate tomorrow’s BLS report. That would set the range from 95K to 126K.
Gallup also reports little to no improvement in the employment picture in its monthly assessment. Using similar survey techniques as the BLS, they show a stagnant workforce participation rate, and a slight uptick in the adjusted unemployment rate:
The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was 43.4% for the month of March, unchanged from 43.3% in February and in line with the 43.7% found in March 2012.
Gallup’s P2P metric is an estimate of the percentage of the U.S. adult population aged 18 and older who are employed full time by an employer for at least 30 hours per week. P2P is not seasonally adjusted. …
The U.S. workforce participation rate in March was 67.7%, unchanged from 67.8% in February and in March 2012.
Gallup’s unadjusted unemployment rate for the U.S. workforce was 8.0% for the month of March, the same as in February, but a modest improvement from 8.4% in March 2012.
Gallup’s seasonally adjusted U.S. unemployment rate for March was 7.8%, a slight uptick from 7.6% in February, but down since March 2012. Gallup calculates a seasonally adjusted employment rate by applying the adjustment factor the government used for the same month in the previous year. Last year, the government adjusted March’s rate down by 0.2 points, but February’s was adjusted downward by 0.4 points, which accounts for the month-over-month increase in seasonally adjusted unemployment, despite the lack of change in the unadjusted rate.
One government metric showed a sudden and sharp increase in joblessness. Weekly initial jobless claims increased this week by 28,000 to hit 385,000, a level not seen for quite a while:
In the week ending March 30, the advance figure for seasonally adjusted initial claims was 385,000, an increase of 28,000 from the previous week’s unrevised figure of 357,000. The 4-week moving average was 354,250, an increase of 11,250 from the previous week’s unrevised average of 343,000.
The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending March 23, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 23 was 3,063,000, a decrease of 8,000 from the preceding week’s revised level of 3,071,000. The 4-week moving average was 3,067,250, a decrease of 10,500 from the preceding week’s revised average of 3,077,750.
That would mean that the claimants lost their jobs in the third week of March, a bump that the BLS may miss in its mid-month surveys. It’s also good to remember that this is an indirectly correlative metric over time, and that single weeks are not terribly reliable indicators, but needless to say it’s not good news for the claimants.
Reuters takes a negative view of the trend nonetheless:
The number of Americans filing new claims for unemployment benefits rose to its highest level in four months last week, suggesting the labor market recovery lost some steam in March.
Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said on Thursday.
It was the third straight week of gains in claims. Coming on the heels of data on Wednesday showing private employers added the fewest jobs in five months in March, the report implied some weakening in job growth after hiring accelerated in February.
Still, they offer this strange prediction:
Employers are expected to have added 200,000 jobs to their payrolls last month, according to a Reuters survey, slowing from February’s brisk 236,000. The jobless rate is seen unchanged at 7.7 percent.
Not only do I think that’s a huge overshoot, I’d bet that the BLS adjusts the February jobs level downward a bit. I’m going to guess that we’ll see an addition of 125,000 jobs in tomorrow’s report — below population growth — and a slight uptick in the jobless rate to 7.8% or a decline in the workforce participation rate to 63.4%.
Take the poll: