What we look for in a monthly jobs report

Sabri Ben-Achour Apr 3, 2014

Updated, Friday at 8:35am ET: The U.S. Bureau of Labor Statistics reported domestic employers added 192,000 to non-farm payrolls in the month of March, leaving the current unemployment rate at about 6.7 percent. 

The numbers are considered an important way to check on the nation’s economic vital signs. A couple things we looked for on Friday: 

Was it the weather after all? December and January weren’t so hot… neither in temperature nor in jobs. Whereas in November we added 274,000 jobs,  December we added 84,000, and in January we added 113,000 144,000.  February wasn’t great either at 129,000 197,000 jobs created. [Strikethroughs represent the original BLS estimates, they revised their numbers in the March jobs report released Friday].

Many economists lay equal parts blame and hope at the feet of the cold weather. Having warmed up since January, we might expect to see a bounce upward in total non-farm payroll. If we don’t, there will be more reason to think that it wasn’t really the weather, but rather that our economy is sicklier than we’d imagined.

How close will we inch to the pre-recession jobs peak? It’s a target that looms in the distance of every jobs report these days. The pre-recession peak for total non-farm payroll employment was 138.365 million people (seasonally adjusted) back in January of 2008. In February of 2014, we were tentatively at 137.699 million people (seasonally adjusted) with fulltime jobs. So we have 666,000 more to go. We aren’t going to get that tomorrow, but it’s conceivable we might in three months or so. Something to think about.  

I can’t go without saying, though, that the pre-recession jobs peak is a misleading reference point.

We shouldn’t be happy with the level of employment back in 2007 Because we’ve had lots of new people join the workforce. The Hamilton Project (affiliated with the Brookings Institute) keeps track of the “jobs gap,” which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.

The date when they’ll really catch up? The estimate is 2020.

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