The Bureau of Labor Statistics, an arm of the Labor Department in Washington, released its monthly Employment Situation report for February last Friday before the start of trading on Wall Street. The numbers continue to be encouraging.
According to the BLS, the US economy added 227,000 net new jobs last month. That was comprised of a gain of +233,000 private sector positions, depressed slightly by -6,000 net layoffs from state and local governments.
revisions were up, too
The BLS numbers are complied from reports submitted to it by major US companies and by big state and local government bodies. For reasons I’ve never bothered to find out, the figures don’t come in all at once–or on time. Instead, they trickle in, bit by bit, over a three-month period. So the BLS publishes an initial estimate, followed by revisions in the two subsequent months.
The important thing about revision is that when the economy is picking up steam, revisions tend to be up, as well. When the economy is sagging, revisions tend to be down. In other words, the revisions act as confirmation of the primary trend.
Since the nadir for the ES last summer–no new jobs shown in the August report (later revised up significantly)–revisions have been positive.
For February, the revisions are as follows:
—January was initially reported as having added 243,000 jobs, +257,000 in the private sector and -14,000 in state and local governments. That’s been revised up by an extra 41,000, to +284,000 jobs (+285,000 private sector additions, offset by -1,000 positions eliminated by state and local governments).
—December 2011 was first reported as a gain of 200,000 positions, +212,000 new jobs in the private sector and -12,000 in state and local government. The January ES report upped that by 3,000 jobs (+220,000 private sector, a loss of -17,000 in state and local governments). The final tally for December, released this month, has raised the jobs additions by another 20,000 (+234,000 in the private sector and -11,000 in state and local governments).
This month’s revisions, then, upped the overall tally by 41,000 jobs.
stock market implications
–February was the third month in a row where job increases were significantly above the 150,000/month level. +150,000 is important. That’s the average number of new workers finishing school and entering the workforce each month. So the first 150,000 hires just keeps the number of unemployed people from rising. Everything above that represents people who lost their jobs during the recession getting back to work.
–The longer this healing continues, the less pressure the Fed will feel to begin any new monetary easing measures. Also, the sooner the day will come when the Fed begins to raise the current extraordinarily low interest rates back toward a more normal level.
–the data seem to me to reinforce the analysis of strategists like Jim Paulsen of Wells Fargo that the current economic recovery is not unusually weak. Rather, its par for the course for the US in the post-1980s era.
–increasing employment also seems to me to underline the idea that the greatest gains among domestically-oriented stocks this year will be with companies that cater to a wider audience than just the wealthiest quarter of the population. The latter have been the big winners from the start of the market upturn in March 2009 until last summer.
–I’m very willing to believe that the EU will remain the caboose on the world economic train for come time to come. But if we take recent signs that many emerging economies are about to ease monetary policy, and add that to the start of more quantitative easing in Japan and employment strength in the US, the overall train may be moving faster than the consensus expects. So, while a relative laggard, the EU may not be so bad as expected in absolute terms. If so, picking through the rubble of EU stocks to find a few secular growth names may not be as risky as investors now think. (I wouldn’t go crazy, but one or two stocks–bought either locally or in ADR/GDR form–might be good additions to your portfolio.)