Everyone was hoping this week's jobs report would lead to a rise in mortgage rates, and that's exactly what happened last month. On the contrary, the 10-year bond yield was less responsive after the headline numbers came out better than expected, while the employment report was revised negative from last month.of federal reserveFears that wage growth would get out of control have not materialized for more than two years, and the unemployment rate has risen to 3.9%. For now, we can say that the labor market is no longer tight, but it has not collapsed either.
A key labor data line in this expansion is the weekly unemployment insurance claims report. Unemployment claims show that even as the economy expands, jobs are still not being lost.A recession will only occur if unemployment claims exceed this level. 323,000 on a 4-week moving average.
From the Fed: The number of first-time applications for unemployment insurance benefits was flat at 217,000 for the week ending March 2. The four-week moving average decreased by 750 cases to 212,250.
Below is an explanation of how we got here in a labor market that all started during COVID-19.
1. I created the COVID-19 Recovery Model on April 7, 2020 and retired it on December 9, 2020. By then, the preliminary recovery phase had been completed and it was necessary to model when jobs would be lost. return.
2. In the early days of the labor market recovery, the weak employment numbers made me double and triple my assertion that this recovery would lead to 10 million job openings. The number of job openings has increased to 12 million and currently stands at over 9 million. Despite the massive error in the May 2021 employment report, I wasn't upset.
Job openings, turnover and employment data are now below pre-COVID-19 levels, meaning the labor market is not as tight as it once was, which is reflected in the employment cost index. This is the reason why the data trends are delayed. Rate of quitting.
3. I wrote that all jobs lost to COVID-19 should be regained by September 2022. At that time, this was a rapid recovery in the labor market, and it also happened on time.
total employment data
4. This is the important point for now: If COVID-19 had not occurred, there would be between 157 million and 159 million jobs today, which would be in line with the February 2020 job growth rate. 157,808,000. This is important because employment growth should be slowing now. It is more in line with the direction the labor market should be when averaging. 140,000 to 165,000 per month. So for now, the fact that it's not hovering between 140,000 and 165,000 means there's still a little more recovery kick left before we get down to those levels.
from BLS:Nonfarm payrolls increased by 275,000 in February, pushing the unemployment rate to 3.9%, the U.S. Bureau of Labor Statistics announced today. Employment gains occurred in health care, government, food services and restaurants, social assistance, and transportation and warehousing.
Jobs created and lost in the last month include:
In this employment statistics, the unemployment rate by education level is as follows:
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Less than high school diploma: 6.1%
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If you are a high school graduate but have not attended college: 4.2%
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College or Associate Degree: 3.1%
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Bachelor's degree or higher: 2.2%
Today's report continues the trend of the labor numbers beating my expectations, but only because I expect them to slow down to the 140,000 to 165,000 level, but still That's not happening. I would no longer classify the labor market as tight based on job report turnover or hiring data. This is also reflected in the employment cost index. These are important data lines for the Fed, and are the reason for three rate cuts this year.
