U.S. Bureau of Labor Statistics Underestimates March Employment Gains by 211,000 Employees;...

Business Editors

SANTA ROSA, Calif.--(BUSINESS WIRE)--April 6, 2004

Though widely accepted as a recovery indicator, Friday's U.S. Bureau of Labor Statistics (BLS) employment report significantly underestimates March employment gains. According to the BLS, U.S. non-farm employment

increased by a seasonally-adjusted 308,000 employees in March. According to TrimTab's year-over-year methodology using non-seasonally-adjusted BLS data, non-farm employment increased by 519,000 employees. The TrimTabs figure is far more consistent with improvements in other employment, wage and salary indicators.

In analyzing the past thirty-five years of employment data, TrimTabs finds seasonal variations in employment are highly predictable. By quantifying seasonal patterns, TrimTabs can accurately assess employment increases and decreases. TrimTabs contends the seasonal adjustments and benchmark revisions to BLS data appear to understate employment improvements during business cycle expansions by 30% to 40%.

"Employment posted healthy gains for the second straight month, but even more encouraging, the March improvement was broadly based rather than heavily concentrated in the service sector," said Madeline Schnapp, Editor of TrimTabs U.S. Employment Update. Employment in both the goods-producing sector and service-producing sector rose strongly. The greatest employment gains came in the raw materials sectors, construction, retail trade (specifically general merchandise and department stores), air transportation, credit services, accounting and architectural services, health services, and food services. In a significant change from previous months, government services expanded only slightly. "Despite recent employment gains, the economic recovery remains highly dependent on monetary and fiscal stimulus which is problematic over the long term," noted Schnapp. "Even so, we anticipate the March momentum will continue into April."

Employment began to rise in August 2003, remained flat in November 2003, and improved markedly in December 2003. So far this year, employment was flat in January, improved in February, and surged in March. TrimTabs also measured employment gains of 928,000 employees since December 2003. In a healthy growth year, employment typically increases about 2.6% year-over-year in March. While this past March's increase was only about 0.5% year-over-year, it was far better than the BLS data suggests.

TrimTabs relies on twelve employment indicators, each of which now point to accelerating employment growth. The TrimTabs Online Job Postings Index jumped a healthy 7.1% over the past three weeks and the Conference Board's Help Wanted Advertising Index increased in February. Weekly unemployment claims have held below the 350,000 mark for ten of the past fourteen weeks, suggesting companies have begun hiring. Finally, the Institute for Supply Management Manufacturing Index and Non-Manufacturing Index and the four Federal Reserve Board manufacturing surveys have been reporting increases in employment for several months.

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