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US Non Farms Show Improvement

Published on April 4, 2014, 12:45 GMT

Today is providing a crucial update on the US employment situation with the publication of several key statistics.

The headline Non-Farm Payrolls have just been released at 192k for the month of March, this market moving figure is higher than the February reading of 175k but misses the important consensus estimate of 200k.

US Unemployment has remained static this month, the rate just published of 6.7% is the same as February’s 6.7% and misses the 6.6% anticipated by the market.

The Average Hourly Earning change was lower for the month of March at 0% change month on month, a 0.2% rise had been expected following last months 0.4% increase.
The year on year version of this number is also slightly lower at 2.1%, down on the February reading of 2.2%.

Finally, the Average Weekly Hours number is a little improved at 34.5, this is better than last months 34.2 and had been expected only to reach the 34.4 level in March.
All of these employment statistics are important indicators for the health of the US recovery. Traditionally the real market moving power has been contained in the infamous Non-Farms and of course the official Unemployment reading.

This month things are different, the lesser watched Average Weekly Hours figure is taking on a whole new significance. This is because it is a considered a valid proxy indicator of the difference in full time versus part time employment, as this number rises it tentatively suggests that more workers have moved into a full time role.

At the beginning of this week at a speech in Chicago, Janet Yellen, the Federal Reserve chair stressed that the FOMC would no longer solely consider the overall unemployment level in its deliberations on monetary policy, instead it is now placing an emphasis on the structural nature of the employment recovery. The implication here being that the Fed will be more likely to act once the ratio of part time to full time employment improves. More data will follow to measure this ratio but for now the Average Weekly Hours statistic will be taken as a very early indicator.

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    • According to Yellen the labor market still has a lot of slack, which leads me to believe there's a lot of information the employment report isn't telling us.

    • Unemployment NOT going down is actually a GOOD thing because it means participation is probably improving. How you can talk about recovery with participation at less than 2/3 is beyond me.

    • You forgot to mention the February reading was revised upward by quite a bit. It changed the landscape of where we are employment-wise.

      Jesse Palla
    • Solid report, and good back-to-back numbers. But the wage growth figures are concerning. 0% might subdue consumer spending over the next month or two.


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