Jobs Report and the Monthly Employment Growth Statistics
Where the 103,000 Jobs Were Added in March
The U.S. economy gained 103,000 jobs in March 2018. The economy needs 150,000 new jobs each month to keep expanding. Although the job growth was below the minimum, the Federal Reserve will probably continue raising interest rates at its future 2018 FOMC meetings. Job growth was above 150,000 in January and February.
Where the Job Growth Came From
Health care added 33,800 jobs. The industry remained a strong performer even during the recession.
Uncertainty over Trump's health care plan has not dampened employers' confidence.
U.S. manufacturing gained 22,000 jobs because the strong dollar is subsiding. A weaker dollar helps exports. Durable goods gained 22,000 jobs, helped by a 3,300 job gain in auto manufacturing. Pay close attention to how many manufacturing jobs are added or lost each month. This is a significant leading economic indicator. Factories add workers as soon as they receive a large enough order. It could take months or even years before the order ships and shows up in economic output. Manufacturing is a better indicator of recession than the service sector, whose job levels remain consistent through the boom-and-bust cycle.
The mining industry added 8,000 jobs, spurred on by higher oil prices. Excess supply from U.S. shale oil producers is getting absorbed and OPEC agreed to limit its output. As a result, future oil prices are expected to rise.
Utilities gained 4,000 jobs.
Leisure and hospitality added 5,000 jobs. Most of these workers are hourly employees. This sector usually adds from 20,000 to 30,000 positions a month.
Financial activities added 2,000 jobs. Banks started adding positions when the Fed began raising interest rates. Higher rates bring greater profitability to lenders because they can charge more for loans.
Information services added 2,000 jobs. This sector, especially Silicon Valley, is critical to American global competitiveness.
The government gained 1,000 positions. That's despite President Trump's promises to streamline the federal government.
Industries That Lost Jobs
The retail industry lost 4,400 jobs. Store managers had been slashing jobs since March 2017. Online sales have been cutting into bricks-and-mortar stores. Wholesale, which usually follows retail, atypically added 11,400 jobs.
Temporary help services lost 600 jobs. Companies often add temp jobs when business is picking up, but they aren't confident enough to add full-time positions.
The U.S. Jobs Report Explained
The monthly jobs report is also called the "Employment Situation Summary" and the "Non-Farm Payroll Report." It's a critical economic indicator because it's the first report of the month. It's also the most comprehensive and credible.
The Bureau of Labor Statistics surveys 160,000 non-farm businesses and agencies on the number of jobs, the wages paid and the hours worked.
The jobs report will tell you which industries are adding jobs, whether American workers are working longer hours and how fast salaries are increasing.
The jobs report also provides the unemployment rate. To get the number of unemployed individuals, the BLS must undertake a separate survey of households instead of businesses. This household report also includes workers' age, sex and race/ethnicity. The household survey has a more expansive scope than the establishment survey. That's because it includes the self-employed, unpaid family workers, agricultural workers and private household workers, who are excluded by the establishment survey.
The household survey is not as accurate as the business establishment, though. It has a smaller sample size. That's why employment numbers are taken from the establishment survey.
That's why the current unemployment statistics show a different trend than the jobs report.
There are two other jobs reports. The monthly ADP National Employment Report® is released on the first Wednesday of each month. It's produced by the ADP Research Institute, SM and Moody’s Analytics. It uses business payroll data to report on the number of jobs added in the private sector. It excludes farming (as does the BLS report) and, more important, government jobs (included in the BLS report). For that reason, it's considered incomplete.
The ADP Report is important though, because it's released the Wednesday before the BLS report. It gives some analysts an earlier view of what might happen in the Friday report. ADP is quick to say it's not intended to be predictive. Like the BLS report, it's revised as more data comes in later in the month. These revised numbers are 96 percent correlated with the revised BLS jobs report.
The Department of Labor also releases a weekly jobless claims report. This measures the claims for initial unemployment benefits reported by each state every week. It also reports how many of the unemployed are still receiving benefits. This report gives an indication of trends, whether there are more or less unemployed than the week before. The main value of this report is that it is weekly and so it gives some idea of trends in between the monthly jobs reports. It isn’t accurate when predicting the monthly report because it is volatile.