The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Friday, March 6, 2015

February Jobs Report, Unemployment Drops And Wall Street Shudders!

295,000 Jobs and 5.5% Unemployment!

While CNN poked fun at the First Friday of each month has "Jobs Circus day" the significance of the February Jobs Report should not go without a moderate level of fanfare. The lowest level of employment across all 50 states in seven years is drum-roll and trumpet-worthy. CNN Christine Romans.  CNN's MJ Lee keyboarded the related "Jobs Day Circus" piece with particular attention to how boths sides of the political spectrum comments on the data.  

The Lee piece provides a fairly balanced quippy representation of boths sides of the "Jobs" issue. However, when accompanied by a one minute video that is all good news, one would think CNN management could find greater cause in an improving US economy.

The following Facebook post links to a more in-depth discussion of the February Jobs Report and 5.5% unemployment, but the posting comes with a price. It is a bit longer, laden with personal opinion and includes comment from vairous Facebook  posters. It is a good six plus minute segment with particular mention of job growth in areas beyond lower pay jobs: CNN Newsroom, Carol Costello.

The February Jobs numbers cannot go reported without a White House perspective from Jason Fuhrman, Chairman of the Council of Economic Advisers. The economist offers five key points about the jobs report including the significance of the numbers despite inclement weather across many major metropolitan areas. Moreover, if you want a dose of politically adroit, Fuhrman and team also addressed the common GOP retort of "well minority  unemployment is remaining high."

I will pose the second and most intriguing point after the White House report.

White House Dot Gov....


1. The private sector has added 12.0 million jobs over 60 straight months of job growth, extending the longest streak on record. Today we learned that total nonfarm payroll employment rose by 295,000 in February, largely due to a 288,000 increase in private-sector employment. Although private-sector job gains in December and January were revised down, the private employment gains over the past twelve months total 3.2 million—the largest 12-month increase since 1998.

2. Despite a string of recent snowstorms in the northeast—and Boston’s snowiest month on record—winter weather appeared to have little impact on the headline figures in today’s report. While overall job growth was robust and the national average workweek was steady, the details of the employment report do offer some insight into the effect of weather on economic activity. In particular, 1.4 million nonagricultural workers that usually work full-time reported working part-time (fewer than 35 hours per week) due to bad weather, likely reflecting a February 8-10 snowstorm that coincided with the survey reference week. Another 328,000 nonagricultural workers reported missing work for the entire survey reference week due to bad weather. Both these figures are elevated from January, but below what was seen last February, when substantial snowfall stretched into parts of the southern United States that may be less accustomed to winter conditions. Even by Boston’s standards, this year’s winter undoubtedly qualifies as severe, creating hardship for many families and likely affecting other economic data such as vehicle sales and first-quarter GDP.

3. While the overall unemployment rate has fallen 1.2 percentage points over the past twelve months to 5.5 percent, the African American and Hispanic unemployment rates have fallen even more quickly, but remain unacceptably high. Relative to last February, the unemployment rate for African Americans is down 1.6 percentage points, while the Hispanic unemployment rate is down 1.5 percentage points. Reflecting these large declines, the African American and Hispanic unemployment rates are nearly all the way back to their pre-recession (2001-2007) averages. Despite this progress, however, it is important to note that these groups endured much larger percentage-point increases in unemployment rates during the recession, and a return to pre-recession averages would still leave these rates at high levels. This is why the President has proposed a number of policies—including the My Brother’s Keeper initiative for young men of color, tax relief for working families, and investments in skills education from pre-K to college—to help reduce disparities in labor market outcomes.

4. The last time the private sector added more than 12 million jobs over five years was April 1996 to March 2001. There are some notable differences between the current stretch of job gains and the one from 1996 to 2001. In particular, the manufacturing sector has added 877,000 jobs over the last five years, while it lost 255,000 jobs during the 1996-2001 period. Moreover, the private-sector job gains during the 1996-2001 period coincided with the addition of more than 1.5 million State and local government positions; in contrast, over the last five years, State and local government employment has on net fallen by 423,000 jobs. The two periods did, however, exhibit remarkably similar job growth in sectors like health care and social assistance, retail trade, and transportation and warehousing. Finally, it is worth noting that the two periods took place at different stages of the business cycle—in 1996, the economy was well into a period of sustained expansion, but in 2010, it was just starting to recover from the worst crisis since the Great Depression. That is why despite the progress that has been made, the President believes more must still be done to capitalize on the recovery and strengthen the labor market.

5. Job growth in a number of industries diverged from recent trends in February. Looking over the 60-month streak of private-sector job growth, February was one of the top ten strongest months for leisure and hospitality (+66,000), private educational services (+21,000), and professional and business services (+59,000, excluding temporary help services). However, February was a weak month for temporary help services (-8,000) and for mining and logging (-8,000). Manufacturing gained 8,000 jobs last month, and the sector has gained 877,000 jobs since February 2010. Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months ticked up to 0.13, remaining near the lowest in over two years. This reflects the high number of industries that saw unusually divergent performances in January and February.

As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data as they become available.


As the jobs news day progressed the startling news of a plunging Dow Jones Industrial Average induced an episode of personal "Deer in the Headlights."

Dow 279 points

For a better and much more pronounced perspective let's take a look at a CNN Money, five day graphic. 


(Dow Jones Global Indexes: INDU)

As of 4:29pm ET
 -278.94 / -1.54%

Quote Details

Previous close18,135.72
Day high18,135.72
Day low17,825.15
Today's volume113,353,084
Average daily volume (3 months)94,510,636
Average P/E17.6
1 year change+8.74%

Sadly, as the middle class eyes a degree of "jobs" relief, those who earn millions and more well off investors become sickened regarding their earnings potential.

The market will return, but I posit it should take a major backseat to an economy that has clawed its way back for the Abyss of the Bush Years. 

Unfortunately, there are millions and a conservative political party that hold my posti in total contempt.

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