Employment numbers released by the government are higher than analyst projections, thereby possibly masking anemic employment and wage growth, research firm TrimTabs Investment Research said Wednesday.
The company released a new report questioning the accuracy of jobs data coming from the government.
TrimTabs believes the U.S. economy added 187,000 jobs in March and has averaged 172,000 new jobs in the past three months.
Those estimates are far below projections from the U.S. Bureau of Labor Statistics, which is expected on Friday to report the creation of 200,000 new jobs for the month of March and a three-month average of 245,000 jobs, TrimTabs said.
“The real-time data supports our view that the U.S. economy is stuck in slow-growth mode,” wrote Madeline Schnapp, director of macroeconomic research at TrimTabs.
The TrimTabs report draws employment estimates from daily income deposits to the Treasury. TrimTabs is critical of the BLS department’s results, which are made on various economic assumptions and then revised as time passes and other data emerge.
The research firm believes the government’s BLS employment results are off because they are affected by seasonal adjustments and a general assumption that the economy is in “an accelerating growth phase.”
But TrimTabs is more skeptical, saying real wage and salary growth year-over-year is up only 0.8% in March when factoring in the effects of inflation. That is far more pessimistic than the BLS data, which reported wages and salaries rose 4.4% year-over-year in February.
TrimTabs also pointed out that more people have been exhausting their emergency and extended unemployment benefits.
“This spring has déjà vu written all over it,” wrote Schnapp. “Similar to what happened in the spring of 2010 and 2011, the economy has perked up modestly due to temporary factors, such as mild winter weather, the payroll tax cut, and cash from income tax refunds. These factors have masked the economy’s underlying weakness, which will probably become more apparent later this spring or summer.”
Last week, jobless claims for the week ending March 24 fell by 5,000 filings to 359,000 unemployment claims.
The report brought a dose of optimism to the market, but housing analysts remained somewhat skeptical.
“Because these numbers are as fuzzy as they are, I’m more interested in tracking the number of jobs created on a monthly basis,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings, after last Friday’s jobless numbers were released.
Still, taking the government figures on their face, Sharga noted the potential for a silver lining.
“The country has averaged about 245,000 new jobs a month for the past three months, which is above the minimum threshold of 200,000 new jobs a month most analysts feel is necessary to get the economy moving in the right direction,” he said. “If we can sustain that kind of growth, and if the jobs are decent paying jobs, we should start to see consumer confidence improve, which will have a direct impact on the housing market.”
kpanchuk@housingwire.com
