Prior to this morning’s release of the Employment Situation Summary from the Labor Department, economists polled by Reuters were predicting the addition of 180,000 jobs to public and private, non-farm payrolls. The jobs report showed an actual tally of 98,000 jobs added, a little over half of what was expected. In addition, the Labor Department revised numbers for February and January, reflecting 38,000 fewer jobs than originally reported.
However, unemployment fell to 4.5 percent, with 326,000 fewer unemployed workers, and wages continued their cautious climb, with average hourly earnings increasing by 5 cents to $26.14. So, is this report good news or bad news? For the most part, the answer appears to be, “Wait and see.”
“Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this marks the weakest showing for the economy in nearly a year,” writes Nelson D. Schwartz at The New York Times. “Although it represents just one month’s data, it will raise questions about whether improving business sentiment is actually translating into any meaningful action by employers.”
Some economists point to the weather as a possible cause for the slowdown. If that’s the case, we should see a rebound next month.
The Industries Adding Jobs
Professional and business services added 56,000 jobs last month, in line with monthly averages for the past year. Healthcare added 14,000 jobs, far less than average monthly gains of 32,000 jobs during 2016. Financial activities added 9,000 jobs in March, after remaining flat in February. Retail shed 30,000 jobs, after declining by 26,000 jobs in February. Other industries showed little change last month, including wholesale trade, transportation and warehousing, leisure and hospitality, information, and government.
On the goods-producing side, mining added 11,000 jobs, up from February’s tally of 8,000 jobs added. Construction added 6,000 jobs, down from 59,000 jobs added the previous month. Manufacturing remained flat.
Slower Wage Growth
“Average wages rose 0.2% to $26.14 an hour in March,” writes Jeffry Bartash at MarketWatch. “Yet the increase in hourly pay over the past 12 months slipped to 2.7% from 2.8% in the prior month. In good economic times, wages tend to rise 3% to 4.% a year.”
The PayScale Index, which measures the change in wages for employed U.S. workers, forecast 3.2 percent year-over-year wage growth for Q1 2017. The Index will update next week with the forecast for Q2.
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