April 2020 Jobs Report and Wages

I started doing the monthly Job Report again because this is unique. A pandemic of this magnitude is new to us. But that doesn’t mean we can’t learn from it.

Below are the numbers. Also included are comparisons to last month’s initial run (March was revised down) and one of the worst month of the 2008 Financial Crises.

*Quick note about the 2008 Financial Crises. It was brewing for a few years and the recession actually started in 2007. The slowing due to the pending recession is what caused the glue and popsicle sticks to buckle in 2008. But like practically all downturns, the job losses were lagging. There were a string of months in 2009 which were ghastly. I’m using one for the comparison, but will revisit it once this health crisis has abated. One more note on 2009, the first job gain was in November of 2009… after 23 months of losses. The unemployment rate reached 10.2%

Here are the job market and compensation numbers for April, 2020 (based on the job report):

Net loss of 20,500,000 jobs in the month

  • Analysts expected an overall drop of 21,500,000
  • Private sector payrolls decreased by 19,520,000
  • Private service producing industries shed 17,165,000
  • Goods producing industries shrank by 2,355,000
  • For comparison, the months of January, February, and March of 2009 averaged well over 700,000 job losses a month. It was catastrophic and other than the Great Depression, unheard of. To put a fine point on it, April saw over 20 Million jobs lost.

 

  • March was revised to a loss of 870,000 from an original reading of 710,000
  • February was revised to a gain of 230,000 from an original reading of 275,000
  • Payroll processor ADP reported an employment loss of 20,200,000 jobs (it was a loss of 27,000 jobs in March 2020)

 

  • 939,000 people are considered long term unemployed (jobless for more than 6 months). It was 1.2 million people in March 2020 and it was 6.1 million in March of 2011
  • Employers announced plans to cut 671,129 jobs, the highest single-month total on record. Announced plans to cut were 222, 280 jobs in March. It was the most since January of 2009.

 

Unemployment rate rose to 14.7%. It was 4.4% in March, 2020, and 8.5% in March of 2009

  • The labor participation rate is 60.2%. It was 62.7% in March, 2020
  • The employment to population ratio is 51.3%. It was 60.0% in March, 2020
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), increased to 22.8%. It was 8.7% from 7.0% last month
  • PMI, a measure of manufacturing pace, is 41.5%. It was 49.1% in March, 2020. This was after a 131 months of expansion. Anything above 50% means the machines are running
  • Service sector activity dropped to 41.8%. It was 52.5% in March 2020.

 

Specific Segment Job numbers:

  • Manufacturing down 1,300,000. It was down 18,000 jobs in March 2020, and lost 161,000 in March, 2009
  • Construction lost 975,000 jobs. It was a loss of 29,000 jobs (averaged an increase of 17,583 jobs a month over the last year), it was a loss of 126,000 jobs in March, 2009
  • Retailers lost 2,100,000 jobs. 46,000 jobs were lost in March, 2020, and a loss of 48,000 in March of 2009
  • Leisure and Hospitality Services lost 7,700,000 jobs or 47% of the industry. It was a loss of 459,000 jobs in March, 2020, and was a loss of 40,000 jobs in 2009
  • Government sector declined by 980,000. It rose 18,000 in March 2020, and a loss of 5,000 in March, 2009
  • Education and Health Services dropped by 2,500,000 jobs. It was a loss of 76,000 jobs in March, 2020Health Care and Social Assistance lost 2,086,900. It was a loss of 61,200 in March.
    • Health Care grew by 14,000 in March of 2009
  • Professional and Business Services down by 2,165,000. It was down by 52,000 in March, 2020.
    • 841,900 jobs lost in Temporary Help. It was 49,500 jobs lost in March, 2020

 

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $1,026.34. It was $977.65 in March, 2020. It was $614.20 in March, 2009
  • The average hourly earnings (seasonally adjusted) is $30.01. It was $28.62 in March, 2020
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.5. It was 33.4 hours in March, 2020. It was 33.2 in March, 2009.

Bureau of Labor Statistics

March 2020 Job Report and Wages

Its been years since I last did an analysis of the jobs report. I initially did them before the 2008 Financial Crisis and several years after. 2009 was an interesting year to watch the numbers. I was lucky. I had a job.

For the last 10 years the jobs report has shown steady improvements.

Now is a new time. The numbers for March 2020 were a mix, mostly bad. The COVID-19 virus had just started to influence American businesses when the survey was taken. I anticipate April 2020 will parallel some of the worst months of 2009.

Here are the job market and compensation numbers for March 2020 (based on the job report):
Net loss of 701,000 jobs in the month

  • Analysts expected an overall drop of 84,000
  • Private sector payrolls decreased by 713,000
  • Private service producing industries shed 659,000
  • Goods producing industries shrank by 54,000

 

  • February was revised to a gain of 275,000 from an original reading of 273,000
  • January was revised to a gain of 214,000 from a reading of a 273,000 gain
  • Payroll processor ADP reported an employment loss of 27,000 jobs

 

  • 1.2 million people have been jobless for more than 6 months (long term unemployed) – it was 6.1 million in March of 2011
  • Employers announced plans to cut 222, 280 jobs in March. It was the most since January of 2009

 

Unemployment rate rose to 4.4%

  • The labor participation rate is 62.7% – a decrease of 0.7% in the month
  • The employment to population ratio is 60.0% – a drop of 1.1%
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), increased to 8.7% from 7.0% last month
  • PMI, a measure of manufacturing pace, is 46.6%. Anything above 50% means the machines are running
  • Service sector activity dropped to 52.5%, down from 57.3% last month. Holding relatively positive. A reading in the low 40s was expected

 

Specific Segment Job numbers:

  • Manufacturing down 18,000 jobs
  • Construction lost 29,000 jobs – averaged an increase of 17,583 jobs a month over the last year
  • Retailers lost 46,000 jobs
  • Leisure and Hospitality Services lost 459,000 jobs – this wiped out two years of gains
  • Government sector rose 18,000, 17,000 hired for census work
  • Education and Health Services dropped by 76,000 jobs
      • Health Care and Social Assistance lost 61,200
  • Professional and Business Services down by 52,000
      • 49,500 jobs lost in Temporary Help

 

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $978.80
  • The average hourly earnings (seasonally adjusted) is $28.62 – an increase of 11 cents from last month (it was $19.30 in March of 2011)
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.4 hours

 

Bureau of Labor Statistics

There are Two Rules for Success

Clever quotes. What can I say. They spin the mind. They’re like a playful toy to a youth. I ran across one a couple of months ago and it has stuck with me. It is by Roger H. Lincoln.

 

There are two rules for success:

1) Never tell everything you know.

 

At first you’re like yeah, where is number two? What’s the second rule? You’re interested. You want to know what the two rules are.

Its transactional. The deal is: you read the quote and you get the information. And this quote doesn’t complete the deal.

But then you read it again. And after a pause you realize that is the point.

Its experiential. Its a joke. Its clever wordplay. You get a little mental reward for switching how you see it.

Sometimes you have to sit back and ask yourself “how should I be thinking about this?”

Welcome Back

My name is Ben Leeson. I wrote this working thoughts blog for several years originally between 2007 and 2013. More posts are coming.

A few things about me:
I created this blog to excercise my critical thinking and writing skills. It worked.

I work in financial services. I advise start ups. I golf.

I have a family. Beautiful wife, kids, and a dog.

There are several posts missing due to hosting being cancelled. Pictures have been deleteted. The template is old.

I write this blog because I like the macro side of HR. This is people, jobs, the economy, and things like that.

Thank you.

December 2010 Jobs Report and Wages

Here are the job market and compensation numbers for December 2010 (based on the job report):


Net gain
of 103,000 jobs in the month
(revised to a gain of 152,000)

  • Analysts expected an overall gain of 146,000
  • Private sector payrolls increased by 113,000
    • Private service producing industries added 115,000
    • Goods producing industries lost 2,000


  • November was revised to a gain of 92,000 a revision of 71,000 and from an original reading of 39,000 gain
  • October was revised to a gain of 171,000, from a revised reading of 172,000 and an original reading of 151,000
  • Payroll processor ADP reported an employment gain of 297,000 jobs
  • Including population growth, the job market is 11 million jobs below the point of when the recession began 3 years ago
  • The US labor force is smaller now than when the recession began, by 4 million people
  • 6.4 million people have been jobless for more than 6 months (long term
    unemployed) – up significantly from the last four months

    • 44.3% of the unemployed are long term unemployed – ratcheted up up from 41.9% last month
  • The
    main type of hire for the past few months was for Temporary Help Service (+16,000) but this month the large gains were in Leisure and Hospitality (47,000) and Health Care (37,100)

Unemployment rate dropped to 9.4%

  • Analysts predicted it would be 9.6%
  • The unemployment rate has been over 9% for 20 months
  • 260,000 people dropped out of the employment count producing a labor force participation rate of 64.3% (66.5% is average to good)
  • The employment to population ratio is 58.3% – relatively unchanged
  • The
    U-6
    report, which is a broader group to count (workers who are part
    time but want to be full time and discouraged worker), dropped to 16.7%.
    This reflects the same decrease of unemployment rate to 9.4%
  • PMI,
    a measure of manufacturing pace, is 57% and the 20th consecutive
    month of readings over 50 percent. Anything above 50% means the
    machines are running

Specific Segment Job numbers:

  • Manufacturing gained 10,000 jobs
  • Construction lost 16,000 jobs
  • Retailers gained 12,000 jobs
  • Leisure and Hospitality Services gained 47,000 jobs
  • Government sector lost 10,000, Federal gained 10,000
  • Education and Health Services grew by 44,000 jobs
    • Health Care and Social Assistance grew by 37,000

  • Professional and Business Services grew by 7,000
    • 15,900 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $645.46 – an increase of $2.59
  • The average hourly earning (seasonally adjusted) is $19.21
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.6 hours

Bureau of Labor Statistics

Job Report Stats Summary

Good Time to be a Tech Startup

“This is our decision – to live fast and die young.”

“We’re out looking for astronauts, looking for astronaunts”

These are lyrics from songs I like (Fated to Pretend by MGMT and Looking For Astronauts by The National), but they came to mind as I read an article on Fortune.com this week called The Implications of too Much VC Money and too Little Startup Talent by JS Cournoyer.

Cournoyer highlights the market for technology talent and focuses on the supply and demand curve is currently very much in favor of the worker. Evidence of this is Google giving 10% raises across the board. This was to prevent an ever escalating clash with other tech firms. But another tactic is underway as well – buying start ups for the engineers. Companies like Microsoft, Apple, Facebook, and Oracle are flush with cash. They are looking for astronauts.

But here we sit with 9.6% unemployment. And remember we need about 2.5% GDP growth to generate jobs, so to lower the unemployment rate to 8.6% growth would need to be around 5%. Where is the innovation for this to happen?

Investors believe it’s in Startups. Investment is near the levels of 1999, the last gold rush. It’s a smart play really, invest in a potential target of a company like HP – a company with lots of cash – and work them to transfer some of that wealth in the form of a purchase. Knowing what companies fit the portfolio is important. This is our decision, to live fast and die young.

Although web development is always big, I think the next group of experts is in data. The growth of data is estimated to be increasing at a compounding rate of 60%. We won’t be hearing statements like “I need more data.” We’ll hear “Can I trust the data?” When a resource over a 5 year term is 10x more abundant you know money is to be made.

This is our decision
To live fast and die young
We’ve got the vision
Now lets have some fun

Yeah, it’s overwhelming
But what else can we do?
Get jobs in offices
And wake up for the morning commute?

Happy Holidays!

Merry Christmas everyone.

And if you don’t celebrate Christmas then I hope you have an extra helping of
happiness and healthiness.