April 5, 2024
Private sector employment jumped by 233 thousand in March after having risen 206 thousand in February and 196 thousand in January. In the past three months the average increase has been 212 thousand. The March increase was larger than the 180 thousand increase that had been expected, and there were slight upward revisions to the employment gains in January and February. The bottom line is that the employment gains remain sizeable. It appears that some undocumented workers crossing the southern border with Mexico are the source of the continuing sizeable gains in employment.
In addition to hiring workers employers can also alter the length of the workweek for their existing workers. The nonfarm workweek rose 0.1 hour in March to 34.4 hours after having risen 0.1 hour in February. After having dipped sharply in January the workweek has come roaring back to the same general level that existed throughout last year. Our sense is that the January drop was adversely impacted by the bad weather that existed in that month.
Job openings have fallen from a record high level of 11.7 million in early 2021 to 8.8 million, but firms continue to be unable to fill open positions. In fact, there are currently 1.4 job openings for every unemployed worker. The demand for labor continues to outpace supply.
The change in employment and hours worked are reflected in the aggregate hours index which rose 0.5% in March to 116.5 after having risen 0.4% in February after having declined 0.4% in January. This index increase by 1.0% in the first quarter which appears to be relatively consistent with our projected 2.5% GDP growth rate for that quarter if productivity climbs 1.5%.
Manufacturing employment was unchanged. Construction employment rose by 39 thousand. Retail trade jobs rose by 18 thousand. Health care jobs gained 72 thousand. Social assistance climbed by 9 thousand. Info tech jobs were unchanged. Transportation and warehousing rose by 1 thousand. Leisure and hospitality jobs climbed by 49 thousand. Professional and business services increased 7 thousand. Financial sector jobs rose 3 thousand. Government jobs rose by 71 thousand almost exclusively at the state and local level.
Given these steady employment gains we expect GDP growth of 2.5% in the first quarter.
Stephen Slifer
NumberNomics
Charleston, S.C.
Manufacturing employment rose 23 thousand. Construction employment rose by 11 thousand. Retail trade jobs rose by 45 thousand. Health care jobs gained 70 thousand. Social assistance climbed by 30 thousand. Info tech jobs rose 15 thousand. Transportation and warehousing rose by 16 thousand. Leisure and hospitality jobs climbed by 11 thousand. Professional and business services jumped by 74 thousand. Financial sector jobs rose 8 thousand. Government jobs rose by 36 thousand almost exclusively at the state and local level.
Given these steady employment gains we expect GDP growth of 1.8% in the first quarter.
Stephen Slifer
NumberNomics
Charleston, S.C.
We have seen a change in the way companies are hiring employees. As the owner of the staffing company temp to hire has been a very popular strategy the last several years. Now companies are actually hiring people directly to their payroll and willing to pay fees. That would seem to indicate that they do not expect a downturn in the near future. Good news for all of us.
Thanks for the comment, Neil. From what you said, it certainly suggests that if they do expect a recession it will be short and mild and they will soon need those bodies. But what if rates really do need to go to 6% to slow things down enough to trigger the recession? The outcome may not be quite so mild. We will see.