Highlights:

• Job growth recovers in March for men and women.
• For women, the recovery in the employment index was higher than that of men.
• Index levels-overall and by gender- remain lower than their pre-pandemic levels.

Welch Consulting Employment Index Shows Recovery in March

Welch Consulting Employment Index shows recovery for men and women

What is the Welch Index?

The Welch Index is a data analytics tool used by our labor economists to measure full-time equivalent employment after adjustment for population growth and the aging of the workforce. An Index value of 100.0 indicates that the adjusted full-time equivalent employment level is the same as its level in the base period of July 2004.

Any decrease (increase) in the Index value over a particular period implies that full-time equivalent employment level has decreased (increased) relative to the growth of the adult population during that period.

For example, over the past 12 months the Index has fallen 3 points, from 101.3 to 98.3. This means the full-time equivalent employment level increased at a rate 5.3% slower than the increase in the U.S. adult population over the past year (after making adjustments for the aging population).

Over the past three years, the overall Index value has declined by 2.9 points or at an average rate of approximately .96 points per year.  This average rate of decline is an improvement of .5 points relative to what it was in February. Focusing on gender, we find that the Index for women is down 1.5 points while the Index for men is down 4.1 points over the past three years.   Given the onset of the pandemic, the employment levels have declined quite a bit and are even lower than what they were 3 years ago.

Employment Levels Recover in March

Between January and February of this year, the Index remained stable. Last month, it recovered by .4 points from a value of 97.9 in January and February to 98.3 points in March.  The is the most the Index has recovered over the previous month since September of 2020.

The percent of the initial January to April decline that has been recovered to date increased from 64% in February to over 67% in March.  Despite steady recovery over the past few months, the Welch Index remains well below its pre-pandemic levels. For example, it would have to increase by 5 points to reach its pre-pandemic January 2020 level of 103.3.

Employment Levels have Recovered for Women and Men in March 2021

Welch Employment Index shows recovery for men and womenThe Welch Index for men declined in February by .1 point but recovered again by the same margin in March. With this offsetting recovery, the March Index for men returned to its January level of 95.3 points.  With this recovery, men reversed 63% of the initial 13.8-point decline between January to April of 2020.

For women, the recovery in the employment levels was higher than that of men. Their Index increased by .7 points from 101.3 in February to 102 points in March.  The percent of the initial January to April decline that women reversed improved from 67.6% in February to over 71% in March. The Index for women has continued to improve steadily since May 2020, and this is the most of the initial decline that they have recovered since May of last year.

With the Index for women increasing at a higher rate than men, the difference in the employment level between women and men has continued to increase since December 2020. In March, this difference increased to 6.7 points from 6.1 points in February.

Underlying Factors Behind the Trends and Concluding Remarks

Improvements in the March employment Index are reflective of the vaccine rollout and reopening of businesses. Our economic consulting experts find that Leisure and Hospitality, as well as Construction sectors, experienced the most gains.

Technical Note: Full-time equivalent employment equals full-time employment plus one-half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch Index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.

Sources:
Cox, J. (2021, April 2). Jobs report blows past expectations as payrolls boom by 916,000 in March. CNBC Business News Economy. https://www.cnbc.com/2021/04/02/us-jobs-report-march-2021.html.