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February was a Strong Jobs Report Across All Measures

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February was another very strong jobs month with the economy adding an estimated 678,000 jobs vs an expected 400,000.

The unemployment rate came in at 3.8%, down from 4%. Labor force participation also improved, rising from 62.2% to 62.3%. Both December and January numbers were revised upwards.

Figure: 1 Change by sector

Last month explained how seasonal adjustments were a big part of the revisions seen in November and December as the BLS worked Covid data into their models. The BLS actually offers all their raw data through an API. The data set is quite rich and the API is fairly easy to use.

The API offers the ability to extract non-seasonally adjusted data. Below is a chart that shows the raw (non-seasonally adjusted) employment data using the same time span as above.

Figure: 2 Change by sector

As can be seen above, the data is far more erratic than the seasonal adjustments. This is precisely the point of seasonal adjustments; to smooth out the monthly fluctuations to provide a more accurate gauge of the job market month over month.

Over the course of the year, the models are refined and adjusted so that the data converges. As shown below, looking over 10 years shows the adjusted and non-adjusted numbers coming in nearly identical once the year completes.

Figure: 3 Change by sector

January is always a very weak month followed by strong numbers leading into Spring and Summer. Even though this year showed a weaker January than last year, February was stronger than last year. Thus, as of now, there is no reason to think this year will be any different. The numbers will converge by year-end as models are further tuned.

However, baked into the models is that future months show strength. What happens if inflation, the war in Ukraine, and an overall slowing economy result in fewer jobs showing up? The models are now calibrated to Covid. The models expect a very strong labor market this spring and summer. After all, the economy actually lost 2.8M jobs in January which was adjusted up to a positive 481k. That is a big gap to make up!

To reiterate, the numbers will converge, but if the economic rebound this Spring and Summer is less than what the models are calibrated for, the job market could start to look very weak. Something to consider against the backdrop of a very strong jobs report.

Back to the Numbers

The seasonally adjusted numbers are blessed by the BLS, Fed, and the market at large, so that is what this analysis will cover. Digging into the details shows a few things:

  • Current numbers are above the 12-month trend in nearly every category
    • Only Government and Leisure/Hospitality came in slightly below trend
  • Construction was more than 3x higher than the 12-month average
  • Education and Health more than doubled the TTM average

Figure: 4 Current vs TTM

The table below shows a detailed breakdown of the numbers. Similar to the 12-month trend, the current month is also above the 3-month trend in many categories.

  • Leisure and Hospitality and Mining/Logging both increased by more than 1%
  • Only Information, Trade/Transportation and Government were below the 3-month trend
  • Over three years, Leisure and Hospitality is still down 6.8%, Manufacturing down 1.7%, with Mining/Logging and Other services down 23.2% and 4% respectively
    • All other private sectors are positive even with the Covid job losses included

Figure: 5 Labor Market Detail


Revisions are still extremely high. Over the last three months, job numbers have been revised up by an average of 280k per month. That is more than 10 times higher than the 3-year average of 27k per month. In normal times, 280k would be an above-average jobs number! Over the last 12 months, the average is a bit lower at 80k, but still way above normal.

Figure: 6 Revisions

Historical Perspective

The chart below shows data going back to 1955. As the labor force has grown in total aggregate numbers, the recessions along the way have caused dips in the general trend. But the trend is still clearly upward.

The Covid recession can be seen as the greatest job market loss. The chart also shows how the rebound has been quite strong. There is still work to do, however. The job market had 152.5M people pre Covid and now sits at 150.4M. The job market is still 2M people short.

This does not consider the normal job growth that would have been seen over the last two years without Covid. With an average of 100k-200k new jobs in a healthy market, the market would have been several million jobs higher on a normal trajectory.

Figure: 7 Historical Labor Market

The distribution of the workforce has changed significantly over the last 65+ years. For example, in 1955, manufacturing accounted for 30% of jobs vs 8.4% today. Education/Health Care has tripled from 5% to 16%.

Although the unemployment rate has been sharply falling over the last year (chart above), the labor force participation (62.3%) is still below pre-pandemic levels (63.4%) and much lower than the 66% pre-financial crisis.

Figure: 8 Labor Market Distribution

What it means for Gold and Silver

There was quite a symbolic action in the gold/silver markets after the release. Typically, a strong job report will crush the price of gold and silver as it gives the Fed more ammunition to raise rates. Instead, gold barely blinked and then started to grind higher through the day.

Gold has now risen quite quickly and is approaching the $2,000 level. $1,950 did give some pause, but it was able to break through. With the CPI expected next week and the Fed meeting the week after, it’s hard to think what could derail the current momentum. That being said, gold has had many false starts over the last couple of years. While it did enjoy a long consolidation pattern recently to launch from, it’s still healthy to rest along any big up-move.

No doubt the conflict in Ukraine is acting as a tailwind, but that does not seem likely to resolve quickly. By the time it does resolve, the market could be far more focused on the Fed and how it walks the tightest of tight ropes. All-time highs are insight. A corrective pullback may be warranted but it’s only a matter of time before it breaks through $2,000 and then $2,067.

Data Source: and also series CIVPART

Data Updated: Monthly on first Friday of the month

Last Updated: Feb 2022

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