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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

March Payrolls Lay a Big Easter Egg

March payroll jobs data disappointed hugely this morning, with total payroll jobs up only 98,000 and private-sector jobs up only 89,000, alongside downward revisions of 38,000 and 23,000, respectively, to February data for these aggregates. The "core" jobs measure we track—private-sector jobs excluding construction and retailing—was only a bit better, up 113,000 in March and a downward revision of 9,000 to February data. To add insult to injury, these soft gains come in contrast to an ADP report earlier this week suggesting very strong March payroll jobs growth after a strong gain in February.

As always, one is well-advised not to pay too much attention to any one month’s number. Again, the weak job growth in March comes after strong growth in February. Average the two months together, and our core measure shows 156,000 gains over the last two months, just a bit shy of the 169,000 average for this indicator over 2011–15.

Still, today’s data do contradict the notion that the economy is picking up steam. We have been pointing out for months in our regular "By the Numbers" installments that job growth has been clearly decelerating since late-2015, as seen in the accompanying chart. The February jobs data gave rise to some hope that things were finally picking up, but today’s data quashed those hopes.

Again, on average, the last two months’ data are of a piece with what we have been seeing for the past 18 months. Economy bulls can claim that the recent gains are merely consistent with an economy at full employment, but even if one buys that argument, the jobs data are still clear that growth is not accelerating, and hopes for faster growth have been a market driver quite a while now. As for GDP growth, the indications are that 1Q17 GDP growth will be just as lackluster as the jobs data have been.

Average hourly wage data showed 0.2% March gains for both the all-worker and production-worker aggregates. While these were decent gains, both measures show deceleration over the past nine months. The factory sector has been showing better growth lately, but there too March payroll data were lackluster.

No, the March data are probably not indicative of any emerging weakness in the economy, but they do cancel out the indications of improving growth that were provided by the February data.

Private-Sector Job Growth
Private-Sector Job Growth
Source: Bureau of Labor Statistics. As of 31 Mar 17

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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