Payroll rundown and always important to look under the hood

Payrolls grew by 272k, almost 100k above the estimate of 180k. The private sector contributed 229k of this vs the forecast of 165k. Revisions to the two prior months were down a combined 15k. In stark contrast, the household survey said 408k jobs were lost and joined with the 250k person drop in the labor force saw the unemployment rate rise by one tenth to 4.0%, matching the highest since November 2021 though historically very low as we know. That said, the trajectory is what matters here. The all in U6 rate held at 7.4%. The big thing though with the household survey is that about ALL of the jobs lost were in the 20 to 24 yr age cohort, totaling a fall of 474k. Those aged 25-54 saw job gains of 87k and the 55 and older crowd saw only a modest drop of 31k. So important to look under the hood here.

Average hourly earnings rose .4% m/o/m, one tenth more than consensus and the y/o/y pace is up 4.1%. For perspective, this averaged 2.5% per annum in the 20 years leading up to Covid. Hours worked were as expected at 34.3 which is where it was in February 2020. Combine this with the hourly earnings figure and weekly earnings grew by .4% m/o/m and 3.8% y/o/y.

The participation rate fell 2 tenths and back down to 62.5%. This was 63.3% in February 2020 because of retiring boomers, among other factors. On the flip side, the 25-54 yr old age group saw its participation rate rise to 83.6% from 83.5% and that is the highest in 22 years. There was another rise in those working part time because of ‘slack work’ to the most since October 2021. Those working part time because they can’t find full time fell by 92k but only after rising by 135k last month to the highest since November 2020.