PRINCETON, NJ -- An analysis of daily Â鶹´«Ã½AV polling shows a drop of 0.3 percentage points in net new hiring activity in the U.S. economy from February to March 2008.
Survey Data Continue to Suggest Weak Job Growth
Given the weaker-than-expected economic reports last week, all eyes on Wall Street are likely to be focused on Friday's Bureau of Labor Statistics (BLS) release of the jobs numbers for March. And while the ADP employment survey has not always been an accurate predictor of future job growth, the markets are likely to look to ADP's estimates for private company hiring in the United States on Wednesday as a possible indicator of what the BLS will report two days later.
Â鶹´«Ã½AV's net new hiring activity measure is an effort to assess U.S. job creation or elimination based on a survey of individual workers. In order to calculate this measure, Â鶹´«Ã½AV asks current full-time employees whether their employers are hiring new people and expanding the size of their workforces, not changing the size of their workforces, or letting people go and reducing the size of their workforces. Net new hiring activity is computed by subtracting the "reducing" percentage from the "expanding" percentage. The measure is based on samples of more than 8,000 employees per month.
(a 2.1-point drop from January) suggested a decline in the number of jobs being created. In contrast, the slight March drop of 0.3 points suggests that hiring activity was essentially unchanged in the past month. On the other hand, Â鶹´«Ã½AV's net new hiring activity measure is not seasonally adjusted and one would normally expect a pick-up in job growth from February to March. This tends to reinforce the idea that Â鶹´«Ã½AV's data suggest -- that seasonally adjusted job growth was flat at best in March and could have declined slightly.
While Â鶹´«Ã½AV's net new hiring activity measure is only three months old, its regional results do seem to provide a degree of face-validity. The biggest drop in reported hiring activity was in the East, where the financial crisis has already begun to have a significant impact on employment. This was mostly offset by an increase of 2.0 points in the Midwest -- part of which could be something of a bounce back from its big drop of 4.4 points last month; part could also be because of the apparent continued strength in the exports and agricultural sectors. Smaller changes in net new hiring activity took place in the South (-0.7 points) and the West (+0.2 points).
Is the U.S. Economy Creating New Jobs?
On Friday morning, the BLS will issue a new jobs report. Given all the bad economic news of the past month, many people may be expecting another decline in U.S. jobs. Of course, the government's unemployment rate and the new job growth numbers reported by the BLS tend to be volatile and subject to substantial revisions over time. Given those facts, however, Â鶹´«Ã½AV's daily monitoring of the U.S. jobs situation suggests that the number of new jobs created will be essentially zero or perhaps slightly to the down side.
If this turns out to be the case, it will be further confirmation that last quarter's economic slowdown is morphing into a full-fledged recession. At the same time, however, if the jobs number is flat or shows a modest decline, it may be seen as good news relative to Wall Street's dismal expectations.
Survey Methods
Â鶹´«Ã½AV is interviewing no fewer than 1,000 U.S. adults nationwide each day during 2008. The economic questions analyzed in this report are asked of a random half-sample of respondents each day. The results reported here are based on combined data of more than 8,000 interviews in January, February, and March. For results based on these samples, the maximum margin of sampling error is ±1 percentage point. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
