United States

March jobs report disappoints

Winter weather took a toll on March jobs count


It may be Good Friday but it was not a good jobs report. The weaker-than-expected initial estimate of March job additions reflects a likely disruption from a second-straight difficult winter, with job losses reported in the goods producing, construction and manufacturing sectors that are typical of those seen during bouts of inclement weather.

The March gain of 129,000 private payroll jobs looks remarkably like the January 2014 report that initially showed a gain of 129,000 but was later revised up to 166,000. This report, like that one, is likely an aberration given the strong above-200,000 trend seen during the past 24 months, and forward-looking investors and firm managers should anticipate a rebound in hiring as the longer-term trend reasserts itself. A difficult winter may have slowed the pace of hiring for a month, but it’s unlikely to dislodge the path of the Federal Reserve with respect to the normalization of monetary policy and a rate increase this year.

The unemployment rate held steady at 5.5 percent, aggregate hours worked declined by 0.2 percent on the month and there was a net downward revision of 69,000 to total employment during the past two months. Perhaps the grand irony in this report is that the economy generated enough jobs to bring down the unemployment rate. While the U-3 will be reported as 5.5 percent, it actually declined to 5.465 percent, and our preferred metric of the labor market — the spread between the U-6, or those unemployed, marginally attached or working part time for economic reasons, and the traditional U-3 unemployment rate — dropped 0.1 percent to 5.4 from 5.5 percent.

Average hourly earnings were up 0.3 percent on the month and are up 2.1 percent on a year-ago basis. Average weekly earnings saw no gain and are up 2.1 percent from a year ago. With respect to the composition of hiring, there were about 70,500 high-paying jobs created in March versus 56.7 low-paying jobs, which is likely indicative of the sharp deceleration in leisure and hospitality (low-wage) jobs, to 13,000 from 70,000 previously.


Source: McGladrey, BLS

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