According to the latest U.S. Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022.  This is a dramatic reversal following an increase of 6.9 percent in the fourth quarter of 2021. In the first quarter, a number of factors appear to have impacted the markets including, but limited to: there was a resurgence of COVID-19 cases from the Omicron variant and decreases in government pandemic assistance payments. Moreover, the quarter experienced some turbulence from supply chain delays and disruptions, which were further exacerbated by the widening conflict in Ukraine. This troubling decline in the midst of inflationary pressures has raised the specter of “stagflation” not seen since the Carter failed presidency.

Job numbers in March maintained pace with another sizable 431,000 new positions according the latest Labor Department figures. (This is more than 2.5x above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). The non-seasonally adjusted construction unemployment remained dipped to 6.0 percent in March, in consistent with improving seasonal weather trends. [The new figure is down 0.7 basis points vs. February ‘22 level; while being down by 2.6 points from the pandemic/shutdown induced 8.6% figure of last March 2021].  Employment in construction continued to trend up in March (+19,000) and has finally returned to its February 2020 level.  

The overall unemployment figure fell to 3.6 percent. (“Unemployed persons” also slipped to 6.0 million per the government count).  The “labor force participation rate” increased to 62.4 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer counted as unemployed by the DOL). The “employment to population ratio” experienced another upward movement of 0.2 to 60.1 percent.  Average hourly earnings level has continued its long steady incremental climb, now standing at $27.06 for private sector production and nonsupervisory employees. 

SEE Workforce Statistics Chart 

Job numbers in February exploded by a sizable 678,000 new positions according to the latest Labor Department figures. (This is more than 4x above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). The non-seasonally adjusted construction unemployment remained elevated at 6.7 percent in February, in keeping with seasonal weather trends. [The new figure is down slightly by 0.4 basis points vs. January ‘22 level; while being down by 2.9 points from the pandemic/shutdown induced 9.6% figure of last February 2021].  Construction added 60,000 jobs in February, following little change in the prior month. About three-fourths of the over-the-month job gain occurred in specialty trade contractors, with increases in both the residential (+24,000) and nonresidential (+20,000) components. Construction employment is still slightly below (-11,000) its February 2020 level.

The overall unemployment figure fell back below four to 3.8 percent. (“Unemployed persons” also slipped to 6.3 million per the government count).  The “labor force participation rate” stayed constant at 62.2 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer counted as unemployed by the DOL). The “employment to population ratio” experienced an upward movement of 0.2 to 59.9 percent.  Average hourly earnings for employees has stabilized at $26.94.

SEE the Workforce Statistics Chart

Job numbers in January jumped-up a sizable 467,000 new positions according to the latest Labor Department figures. (This is 3-times above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). However, the non-seasonally adjusted construction unemployment increased to 7.1 percent in January, in keeping with seasonal weather trends. [The new figure is up 2.1 basis points vs. December ’21 level; while being down by 2.3 points from the pandemic/shutdown induced 9.4% figure of last January 2021].  Generally, construction employment figures stayed relatively steady over the month leaving them still below their February 2020 levels.

However, the overall unemployment figure moved-up slightly by (0.1) to 4.0 percent. (“Unemployed persons” also increased to 6.5 million per the government count).  The “labor force participation rate” improved going up 0.3 point to 62.2 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer counted as unemployed by the DOL). The “employment to population ratio” experienced an upward movement of 0.4 to 59.7 percent.  Average hourly earnings for employees again moved-up to $26.92, confirming a stabilizing of hourly wages at a higher norm in the post pandemic era, due to a shortage of willing workers at this time. 

FOOTNOTE ADDED 2/09/22:  

The large number of new hires reported for January 2022 of 467,000 does not portend well for economy as the Administration’s “rosy of a picture” would like it to suggest.  Embedded in the overall number is the unfortunate realty that “private sector” employment was DOWN some 300,000 in the month over month Dec. 2021 – January 2022. (In fact, this one-month drop is the largest decline in “private” employment during the recovery from COVID-19 disruptions). 

What offset this massive private sector decrease in jobs, was a more astounding one month (Dec. ’21 – Jan. ’22), INCREASE in public/government jobs (federal, state, and local) of 768,000!  This massive increase is almost unprecedented (first since the ramp-up in mid-summer 2020, as part of the CARES Act to address the steep cratering of the economy as part of the COVID pandemic fallout -- which was a one-off until last month).

Given the shift to creating public jobs (dependent on taxing the economy), and away from private sector jobs that would signal a healthy growing economy -- it is not hard to see why the overall mood is not positive.

SEE Workforce Statistics Chart  

The U.S. Bureau of Economic Analysis (BEA) has reported that real gross domestic product (GDP) increased at an annual rate of 6.9 percent in the fourth quarter of 2021 (advanced estimate), following an increase of 2.3 percent in the third quarter.  The acceleration in the fourth quarter (which can be considered partly in light of inflationary pressures) was led by an upturn in exports as well as accelerations in inventory investment and consumer spending.  Counter that COVID-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country.  Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off.

Job numbers in December remained fairly modest, down to only 199,000 new positions according the latest Labor Department figures. (This is slightly above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). The non-seasonally adjusted construction unemployment increased to 5.0 percent in December, in keeping with seasonal weather trends and identical to the pre-Covid 2019 level. [The new figure is up 0.3 basis points vs. November ’21 level; while being down by 4.6 points from the pandemic/shutdown induced 9.6% figure of last December 2020].  Construction employment rose by 22,000 in December, following monthly gains averaging 38,000 over the prior 3 months. In December, job gains occurred in nonresidential specialty trade contractors (+13,000) and in heavy and civil engineering construction (+10,000). However, construction job numbers are still 88,000 below its February 2020 level.

The overall unemployment figure continues to recede down (0.3) to 3.92 percent. (“Unemployed persons” also decreased to 6.3 million per the government count).  “Labor force participation” improved going up 0.1 point to 61.9 percent. [BUT NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer counted as unemployed by the DOL). The “employment to population ratio” experienced an upward movement of only 0.1 to 59.3 percent.  Average hourly earnings for employees again moved-up to $26.61, confirming to some extent a possible stabilizing of hourly wages at a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time. 

SEE Workforce Statistics Chart.

Job numbers nosedived in November to less than half the growth of the previous month, down to only 210,000 new positions according the latest Labor Department figures. (This is barely above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics).  The non-seasonally adjusted construction unemployment moved-up to 4.7 percent in November, in keeping with seasonal weather trends seen in past years. [The new figure is up 0.7 basis points vs. October ’21 level; while being down by 2.6 points from the pandemic/shutdown induced 7.3% figure of last November 2020]. Construction employment rose by 31,000 in November, following gains of a similar magnitude in the prior 2 months. In November, employment continued to trend up in specialty trade contractors (+13,000), construction of buildings (+10,000), and heavy and civil engineering construction (+8,000). Construction employment is 115,000 below its February 2020 level.

The overall unemployment figure continues to recede down (0.4) to 4.2 percent. (“Unemployed persons” also decreased to 6.9 million per the government count).  “Labor force participation” improved going up 0.2 points to 61.8 percent. [BUT NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer counted as unemployed by the DOL). The “employment to population ratio” experienced an upward movement of 0.4 to 59.2 percent.  Average hourly earnings for employees again moved-up to $26.40, confirming to some extent a possible stabilizing of hourly wages at a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time. 

SEE Workforce Statistics Chart.

Job growth numbers were much lower than expected for September at only 194,000 new positions according the latest Labor Department figures (just slightly above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). The belief was that more people would return to the market seeking jobs once federal payments were ended – but that didn’t materialize, at least not yet.  The non-seasonally adjusted construction unemployment remained steady at 4.5 percent in September, a level more akin to 2019 pre-pandemic numbers. [The new figure is down just 0.1 basis points vs. August ’21 level; while being down by 2.6 points from the pandemic/shutdown induced 7.1% figure of last September 2020]. Construction employment rose by 22,000 in September but has shown little net change thus far this year. Employment in construction is still 201,000 below its February 2020 level.  

The overall unemployment figure continues to recede down (0.4) to 4.8 percent. (“Unemployed persons” also decreased to 7.7 million per the government count).  However, “labor force participation” remained little changed at 61.6 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” experienced a slight upward movement of 0.2 to 58.7 percent.  Average hourly earnings for employees again moved-up smartly to $26.14, confirming to some extent a possible stabilizing at a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time.   SEE Workforce Statistics Chart

The job numbers remain choppy as they again failed to meet expectations with August reporting only 235,000 new positions according the latest Labor Department figures (still above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics).  However, the non-seasonally adjusted construction unemployment saw marked improvement falling to 4.6 percent in August, a level more akin to August 2019 pre-pandemic numbers. [That is down some 1.5 basis points vs. July ’21 level; while being down by 3.0 points from the pandemic/shutdown induced 7.6% figure of last August 2020].  Construction employment overall was approximately 230,000 lower than in February 2020.

The overall unemployment figure slipped down (0.2) to 5.2 percent. (“Unemployed persons” also decreased to 8.4 million per the government count).  However, “labor force participation” remained at 61.7 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” experienced a slight upward movement of 0.1 to 58.5 percent.  Average hourly earnings for employees again moved-up slightly to $25.99, confirming to some extent a possible trend to a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time. 

SEE the Workforce Statistics Chart

Hopefully, the swell in job numbers is finally signaling the economy is open for business (if the Delta variant doesn’t derail the gains) with a July report of 943,000 new positions according the latest Labor Department figures (well above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics).  The non-seasonally adjusted construction unemployment also saw marked improvement falling to 6.1 percent in July. [The percentage was down some 1.4% vs. June ’21 levels; while being down by 2.8 points from the pandemic/shutdown induced 8.9% figure of last July 2020].  Construction employment changed every little from the June figures, leaving total jobs approximately 238,000 lower than in February 2020.

The overall unemployment figure saw a half point (0.5) drop to 5.4 percent. (“Unemployed persons” also decreased to 8.7 million per the government count).  “Labor force participation” moved slightly up to 61.7 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” experienced a larger upward movement of 0.4 to 58.4 percent.  Average hourly earnings for employees again moved-up slightly to $25.83, confirming to some extent a possible trend to a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time.

SEE the Workforce Statistics Chart.