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March Employment Preview

by Calculated Risk on 3/31/2022 12:11:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for March. The consensus is for 475,000 jobs added, and for the unemployment rate to decrease to 3.7%.There were 678,000 jobs added in February, and the unemployment rate was at 3.8%.

Click on graph for larger image.

o First, currently there are still about 2.1 million fewer jobs than in February 2020 (before the pandemic).

This graph shows the job losses from the start of the employment recession, in percentage terms.

The current employment recession was by far the worst recession since WWII in percentage terms. However, the current employment recession, 24 months after the onset, is now significantly better than the worst of the “Great Recession”.

o ADP Report: The ADP employment report showed a gain of 455,000 private sector jobs, slightly above the consensus estimates of 438,000 jobs added. The ADP report hasn’t been very useful in predicting the BLS report, but this suggests a solid March BLS report.

o ISM Surveys: The ISM surveys for March have not been released yet.

o Unemployment Claims: The weekly claims report showed a decrease in the number of initial unemployment claims during the reference week (includes the 12th of the month) from 249,000 in February to 215,000 in March. This would usually suggest fewer layoffs in March than in February, although this might not be very useful right now. In general, weekly claims were below expectations in March.

o Permanent Job Losers: Something to watch in the employment report will be “Permanent job losers”. This graph shows permanent job losers as a percent of the pre-recession peak in employment through the January report.

This data is only available back to 1994, so there is only data for three recessions. In February, the number of permanent job losers decreased to 1.583 million from 1.630 million in the previous month.

These jobs will likely be the hardest to recover, so it is a positive that the number of permanent job losers is declining fairly rapidly.
o COVID: As far as the pandemic, the number of daily cases during the reference week in February was around 33,000, down sharply from around 200,000 in February. This is a positive for the job market.

o Conclusion: There is optimism concerning the March employment report. Overall, the ADP report was solid, and unemployment claims decreased during the reference week. This suggests another solid employment report, probably at or above consensus expectations.

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