A smattering of analyst opinions on the job’s report appears pretty mixed. I think the main takeaway here is that this is not a huge market moving event. The improvement is meager and there is A LOT of work yet to be done before we can claim a recovery:
- Goldman Sachs: March Shows Little Underlying Improvement But Other Data Firm
BOTTOM LINE: In a report with something for everyone, payrolls bounce 162,000 in March, due mainly if not entirely to census hiring and weather rebound. On the positive side, payroll data for prior months revised up, and survey of households shows third consecutive month of large job gains. On the negative side, measures of labor utilization – the official unemployment rate as well as the broader “U6” underemployment rate – remain high, and wages suffer a setback.
- Miller Tabak: Today’s employment report is, in our opinion, quite good, although not without its drawbacks. Income growth continues to be lackluster, complicating the spending picture in the immediate future. However, should job growth prove sustainable, incomes will catch up to spending patterns, thus validating the improvement we’ve seen in the first quarter. Simultaneously, it is quite worrisome to see the ranks of the long-term unemployed swell further. There is concern surrounding the skillset of these individuals and the longer they are out of the workforce, the further their skills erode. However, this action shouldn’t be entirely surprising given the fallout in the construction, manufacturing, housing and financial sectors. Indeed, nearly 52% of people are classified as “not on temporary layoff.” That is to say, more than half the unemployed are not getting their jobs back.
- Credit Suisse: A significant turning point for the labor market. The headline came in a little short of consensus, but there were less Census workers and more private jobs than expected. Hefty upward revisions and solid hours and income details. A weather-related bounce is probably flattering March’s strength but the trend is still unquestionably one of progress.
- Morgan Stanley: Weaker than expected report, although many of the underlying details were stronger than the headline reading. For example, net upward revisions to Jan/Feb payrolls amounted to 62,000. Also, the add-on from census workers was only 48,000 (vs an expected +100,000). And, the household survey showed another sharp gain in employment which helped to hold the jobless rate to 9.7%. There is no way to make a precise determination of the weather-related influence on the data over the past couple of months, but the evidence — including the massive swing in the “not at work due to bad weather” series (135,000 in March vs 1,031,000 in Feb) and the gyrations in construction employment — suggests that our original estimate of 100,000 is probably close to the mark.
- Wells Fargo: Jobs grew 162,000 in March with important signals of improvement in services (trade/transportation, business services, leisure & hospitality) and manufacturing (up 3 months in a row) sectors.
- Moodys: The broader U-6 unemployment rate moved up another tenth of a percentage point to 16.9%, as the ranks of part-time workers who would prefer full-time employment rose last month. Clearly, it will take a long time before the labor market feels normal again, as this figure implies that one in six adults is currently underemployed.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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