Will we see non-farm payroll go up for this month?
Going forward, due to time constraints I will not be publishing a weekly jobless claims report. However, I will report on the data when they are significant.
Early next month, a much anticipated non-farm payroll (NFP)number is coming out. I believe the numbers measuring payrolls from this month we are now in could be the first of a string of net additions to non-farm payrolls. Jobless claims are telling me this. When I last reported the claims numbers two weeks ago I said:
I had anticipated growth in non-farm payrolls by the end of this quarter. However, given the still elevated claims numbers, we may not get there.
And while this is still true, the data are looking better than they were two weeks ago.
The Department of Labor reported this morning that:
In the week ending March 20, the advance figure for seasonally adjusted initial claims was 442,000, a decrease of 14,000 from the previous week’s revised figure of 456,000. The 4-week moving average was 453,750, a decrease of 11,000 from the previous week’s revised average of 464,750.
The dip below 450,00 this month is significant because most economists see this as a sort of demarcation line – above this, the economy is losing jobs while below it, we are adding jobs. the employment market is still pretty weak. We really need to see non-farm payrolls increasing 150 to 200,000 per month to bring the unemployment rate down. But, things are headed in the right direction.
Moreover, the downward trend is now being confirmed by recent data. (Seasonally-adjusted 4-week) average jobless claims are now 98,500 below the level six months ago and 186,000 below last year’s level. Unadjusted numbers have gone down equally rapidly, with year-over-year comparisons down almost 180,000. The two charts below demonstrate that this type of downward adjustment is only seen in a technical economic recovery. (For the jobless claims change data, I have used unadjusted numbers)
My hope is that we will see a positive NFP number for March 2010 when the data are released. In any event, I do think the slow improvement in the employment market is enough to sustain the economy over the near term. The worry is that this peters out in the second half of the year. But, for now things look a tad better.
It is interesting that you see 450,000 as the demarcation line between job losses and job growth. I have often seen 400,000 referred to as the demarcation line (Rosenberg is a prominent example).
I agree with Rosenberg that we need claims below 400K to reduce the unemployment rate. But that equates to 150K NFP/month.
In order to get NFPs to positive territory, we’re probably looking at 450,000.