The BLS reported 126,000 jobs added in March.
Here is a summary of recent data:
• The ADP employment report showed an increase of 169,000 private sector payroll jobs in April. This was below expectations of 205,000 private sector payroll jobs added. The ADP report hasn't been very useful in predicting the BLS report for any one month (see table at bottom), but in general, this suggests employment growth below expectations.
• The ISM manufacturing employment index decreased in April to 48.3%. A historical correlation between the ISM manufacturing employment index and the BLS employment report for manufacturing, suggests that private sector BLS manufacturing payroll jobs decreased about 30,000 in April. The ADP report indicated a 10,000 decrease for manufacturing jobs.
The ISM non-manufacturing employment index increased in April to 56.7%. A historical correlation (linear) between the ISM non-manufacturing employment index and the BLS employment report for non-manufacturing, suggests that private sector BLS non-manufacturing payroll jobs increased about 250,000 in April.
Combined, the ISM indexes suggests employment gains of 220,000. This suggests employment growth at expectations.
• Initial weekly unemployment claims averaged close to 283,000 in April, down slightly from March. For the BLS reference week (includes the 12th of the month), initial claims were at 296,000; this was up slightly from 293,000 during the reference week in March.
Generally this suggests about the same low level of layoffs in April as for the previous eight months (employment gains averaged 253,000 per month over that period).
• The final April University of Michigan consumer sentiment index increased to 95.9 from the March reading of 93.0. Sentiment is frequently coincident with changes in the labor market, but there are other factors too - like gasoline prices.
• On small business hiring: The small business index from Intuit showed a 15,000 increase in small business employment in April, the same strong level as in March.
• Trim Tabs reported that the U.S. economy added 327,000 jobs in April. This is up from their estimate of 268,000 last month. "TrimTabs’ employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from the paychecks of the 140 million U.S. workers subject to withholding" .
• Conclusion: Below is a table showing several employment indicators and the initial BLS report (the first column is the revised employment). Two key points:
1) Unfortunately none of the indicators below is very good at predicting the initial BLS employment report.
2) In general it looks like this should be another 200+ month (based on ISM, unemployment claims, and small business hiring).
There is always some randomness to the employment report. My guess is something close to the consensus this month.
| Employment Indicators (000s) | ||||||
|---|---|---|---|---|---|---|
| BLS Revised | BLS Initial | ADP Initial | ISM | Weekly Claims Reference Week1 | Intuit Small Business | |
| Jan 2014 | 166 | 113 | 175 | 236 | 329 | 10 |
| Feb 2014 | 188 | 175 | 139 | -6 | 334 | 0 |
| Mar 2014 | 225 | 192 | 191 | 153 | 323 | 0 |
| Apr 2014 | 330 | 288 | 220 | NA | 320 | 25 |
| May 2014 | 236 | 217 | 179 | 130 | 327 | 35 |
| Jun 2014 | 286 | 288 | 281 | NA | 314 | 20 |
| Jul 2104 | 249 | 209 | 218 | NA | 303 | 15 |
| Aug 2014 | 213 | 142 | 204 | 285 | 299 | 0 |
| Sep 2014 | 250 | 248 | 213 | NA | 281 | 10 |
| Oct 2014 | 221 | 214 | 230 | 340 | 284 | 15 |
| Nov 2014 | 423 | 321 | 208 | 260 | 292 | 30 |
| Dec 2014 | 329 | 252 | 241 | 252 | 289 | 30 |
| Jan 2015 | 201 | 257 | 213 | 115 | 308 | 20 |
| Feb 2015 | 264 | 295 | 212 | 235 | 282 | 10 |
| Mar 2015 | 126 | 189 | NA | 293 | 15 | |
| Apr 2015 | Friday | 169 | 220 | 296 | 15 | |
| 1Lower is better for Unemployment Claims | ||||||
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