- Larry Green, CFA
SMD Forecasts a decline of 106,000 jobs in tomorrow's BLS Non-Farm Payrolls March Jobs report
With the onslaught of COVID-19, the last month has flipped the world upside down. The February Jobs report destroyed expectations, rising 273,000 (even beating our Street High 225,000 estimate). Unemployment dropped to 3.5%. As far as the World knew, the
US Economy was humming along with continued incremental job gains.
The same day as the report, Italy shutdown. A week after that, the US imposed the Europe Travel Ban. And now, just a few weeks later, we are in a soft/hard global quarantine with a virtual complete shutdown of economies around the world.
For perspective, we have been issuing Macro, Industry, and Company Level jobs research based on the
LinkUp Job Post Dataset. This daily data for over 50,000 companies world wide is the basis for our monthly NFP forecast, but also extremely useful in the context of understanding in real-time what is happening in the world of hiring. You can see from the chart, which we update daily here (https://www.smartmarketdata.com/covid-19), that we have seen a >20% decline in advertised jobs in less than a month (down almost 1 Million Since March 13). Companies creating new job posts has all but dried up.
We do see a glimmer of hope in yesterday's addition of over 100K newly created job posts though (Green line in the above chart). A trend here will mean we have bottomed.
Following the last 2 weeks unemployment numbers, 3 million and 6+ million weekly unemployment prints respectively, you would think that tomorrows Monthly employment number would be a disaster. It will be an unprecedented reversal from last months success, and we think will print at -106,000 Net New Non-Farm Payroll jobs. Our forecast though is above the consensus of -150,000, and much better than the Bloomberg Consensus Low of -1,125,000. But this is merely a timing thing. We expect next months April number to be that true disaster, with the NFP down > 1M, and unemployment spiking > 10% - the disaster some expect in this months report.
Unemployment will tic up to 3.6% in March, again just a timing issue. Average hourly earnings will remain at 3.0.
Stay tuned for more updates. Tomorrow is just the beginning for job pain for a minimum of the next few months...
To close, complete thanks and respect to the front line medical, police and emergency services, and many others who are fighting to help at great risk to themselves and their families.
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