March jobs report – ugly

By Steve Eggleston

Before I get to the bad news, I do have some good news, indeed the best news though it is almost 2,000 years old. Jesus Christ is risen. He is risen indeed. Have a blessed Easter.

On Friday, the Bureau of Labor Statistics released the March jobs report, and it was a stinker. The non-farm payroll increased by only 126,000 on a seasonally-adjusted basis, the fewest since December 2013. More telling, the number of employed increased by only 34,000 on a seasonally-adjusted basis, with 96,000 people leaving the workforce.

The seasonally-adjusted labor force participation rate slipped by a rounded tenth of a percent to 62.7%, tied with Decmeber 2014, October 2014, February 1978 and December 1977 for the lowest since October’s 1977’s 62.4%, though each of those 4 months had a lower LFPR when rounded to the nearest hundredth of a percent. While the employment-population ratio remained at 59.3% for the third consecutive month, it was a weaker 59.3% as it slipped from 59.35% in January to 59.34% in February and to 59.31% in March.

Lest one believes that the Great Baby Boomer Retirement spree has started, ZeroHedge has the contraindicators, even if the more-shocking contraindicator is vastly understated. Those over 55 accounted for far more than the 34,000 increase in employment over the last month, with a gain of 329,000 jobs between February and March.

The understated portion is the comparison between the official start of the Great Recession in December 2007 and last month. I can’t duplicate his math, and the differing seasonal adjustments among the age groups make comparing different months of the year problematic, so I’ll use not-seasonally-adjusted numbers and compare March 2007 (the pre-recession March high) and March 2015.

In March 2007, there were 145,323,000 people employed, 119,838,000 of them between the ages of 16 and 54 and 25,485,000 of them aged 55 and older. In March 2015, there were 147,635,000 people employed, 114,375,000 between the ages of 16 and 54 and 33,260,000 of them aged 55 and older. While there were 7,775,000 more people aged 55 and older employed last month than 8 years ago, there were 5,463,000 fewer people between the ages of 16 and 54 employed last month than in March 2007.

If one thinks that is because there are fewer young people around, guess again. There were 816,000 more people between the ages of 16 and 54 in the civilian noninstitutional population last month than in March 2007. Yes it is true that the elderly comprise the vast majority of the population increase, with 18,231,000 more people aged 55 and older in the civilian noninstitutional population.

The employment-population ratio bears that out. In March 2007, that was 73.6% for those between 16 and 54 and 37.4% for those aged 55 and older. Last month, while it slipped to 69.9% for those between 16 and 54, it rose to 38.5% for those aged 55 and older.