Briefing.com


February Nonfarm Payrolls

Updated 09-Mar-10 19:34 ET










Highlights

  • Nonfarm payrolls fell by 36,000 in February after declining by 26,000 in January.
  • The consensus expected payrolls to decline by 68,000.
  • The unemployment rate held at 9.7% in February.
  • The consensus expected it to increase to 9.8%.
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Key Factors

  • It seems forecasters, including us, overestimated the effects of the severe winter weather on the payrolls data. The consensus estimate included a decline of 100,000 in payrolls due to inclement weather. As the BLS stated in its press release, the estimate turned out to be bogus and weather conditions played almost no role in moving the payroll numbers.
  • Importantly, the unemployment rate did not hold at 9.7% due to statistical manipulations. Instead, the data provide evidence of an influx in job creation. The number of employed increased by 308,000 while the labor force rose by 342,000.
  • There is a strong caveat to the unemployment data. The increase in employment is not coming from full-time/high-wage positions. Employment growth was caused by workers taking part-time jobs because poor business conditions made it difficult to find full-time work. These new part-time hires topped the entire aggregate increase in employment, 312,000 to 308,000.
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Big Picture

  • Weekly claims for unemployment have to drop below 400,000 before payrolls will stabilize.
  • Limited wage growth and declining payroll levels are a recipe for very poor consumer confidence and sluggish consumer spending.

Category FEB JAN DEC NOV OCT
Establishment Survey
Nonfarm Payrolls -36K -26K -109K 64K -224K
  Goods-Producing -60K -53K -54K -33K -131K
    Construction -64K -77K -36K -15K -67K
    Manufacturing 1K 20K -18K -25K -57K
  Service-Providing 42K 20K -29K 108K -93K
    Retail Trade 0K 42K -15K 9K -63K
    Financial -10K -13K -9K 2K -19K
    Business 51K 30K 22K 106K 11K
       Temporary help 48K 50K 50K 95K 42K
    Education/Health 32K 23K 37K 31K 35K
    Leisure/Hospitality 7K 0K -33K -21K -54K
    Government -18K 7K -26K -11K 38K
Average Workweek 33.8 33.9 33.8 33.9 33.0
 Production Workweek 33.1 33.2 33.2 33.2 40.0
Factory Overtime 3.4 3.5 3.4 3.4 2.5
Aggregate Hours Index -0.3% 0.3% -0.4% 0.7% -0.4%
Avg Hourly Earnings 0.1% 0.2% 0% 0.2% 0.4%
Household Survey
Civilian Unemp. Rate 9.7% 9.7% 10.0% 10.0% 10.2%
Civilian Labor Force 342K -- -661K -134K -73K
Civilian Employed 308K -- -589K 139K -526K
Civilian Unemployed 34K -- -73K -272K 453K