We will be officially declaring an end to the March Madness Pandemic that started in Mid March. As of this evening the NCAA will crown a new Champion. So far there has been much carnage in the ranks. Expected powerhouses like Michigan, Illinois, Kansas and Alabama succumbed early. Oklahoma has been the only one that came close to actually challenging Gonzaga until the classic that was played Saturday with UCLA, WOW. 101 year old Sister Jean did her best for the Cinderella Loyola Chicago team, they took Illinois to the intensive care ward with that beating. However, in the end, Oregon St sent them packing. From my vantage, this entire pandemic has been fun, even with all the bracket busting. Overall, it appears this year there was Gonzaga and all the rest. My bet is on Gonzaga.
The unemployment numbers released this week continue to point to massive fraud. The report from the Bureau of Labor Statistics this past week indicated that new unemployment claims jumped to 719,000 during the week of March 22. Continuing claims were also much higher than expected at 3,870,000. With the economy opening up across the nation, job postings at near record highs and no major employer announcing any type of layoffs, the numbers did not reflect reality. Major employers must report pending or expected layoffs ahead of time by law. The silence in this area belies the fraud issue. With that many new unemployment claims, where did the job losses come from?
On Friday the government released the new jobs report. The number was over the top huge. Nearly 1,000,000 new jobs created in March. Virtually all sectors showed strong hiring. The trend began in February and continued in March. The industries hiring were not just in manufacturing but in the low wage scale areas such as hospitality, travel, food service and other leisure companies. In fact, this area accounted for over 280,000 in new jobs. Even retail firms added 23,000 jobs. After reviewing the industries, none showed a decrease in hiring overall. A note here on how strong the lower income hiring was, because of the mix of new jobs, the average wage rate fell by four cents to an average of $29.96 per hour.
An indicator I use for unemployment is the U6 number, not the media used number of U3. U3 is total unemployed but does not include those discouraged workers, marginally attached workers or those employed part time for economic reasons. U6 adds all of these workers to see what the true potential base for hiring could be. A year ago, U3 was 4.4%. The U6 was 8.8%. Last month U3 was 6.2% and U6 was 11.1%. If the March unemployment numbers are to be believed, there would be a jump in the U6 as continuing claims of those discouraged workers would be rising. Instead, the U6 dropped to 10.7%, the lowest since March of 2020.
The ISM Manufacturing report released Thursday was a further indication that the unemployment numbers are off. Manufacturing is currently growing at a level not seen since 1983. The ISM report number hit 64.7%, 3.9% higher than February. This report does not use the prior month as a base but rather is about a true long term comparison of activity. Within the report, new orders were 68%, Production 68.1%, Backlog orders rose to 67.5% and the biggie— Employment rose to 59.6%, a jump of 5.2%, the largest I have ever seen in one month.
Comments in the report is that demand is soaring. Issues such as supply chain ability and filling open positions are currently the primary limiting factors in manufacturing. Of the 18 industries tracked, 17 reported growth. No industries reported a contraction, one reported being flat, that being petroleum and coal.
When you take the reports in total, the economy is already getting off to a great start. The government needs to be less afraid of unemployment and unemployment payments and more concerned about the fraud that is existing in the new and existing claims. I will repeat what I shared in a prior blog; The government policy for unemployment payments needs to change from paying individuals for being out of work, to covering expenses for their retraining in qualified programs. There is work out there if one wants it and is trained for it.
Have a great week.
