Job Market Rebounded in March As Employers Added 196K to Payrolls
It may not have been March madness, but the job market rebounded strongly last month, solidly trouncing economists’ expectations.
The Bureau of Labor Statistics reported Friday that nonfarm payrolls grew by 196,000 jobs in March, well above the 165,000 jobs most economists expected, while the nation’s unemployment rate held steady at 3.8 percent.
Health care led with 49,000 new workers; professional and technical services added 34,000; and food and drinking establishments hired an additional 27,000 workers.
Construction rose by 16,000 but manufacturing saw a bit of a contraction, shedding 6,000 jobs.
The weakness stemmed from a sharp drop in employment among automakers, likely reflecting layoffs by General Motors.
In February the automotive giant laid off 4,250 workers in a move to “accelerate its transformation for the future.”
The rebound in the overall March employment numbers was especially noteworthy given the absolutely wretched jobs report the bureau issued in February, when employers added just 20,000 jobs. On Friday the bureau revised that number up to a still anemic 33,000.
January’s huge gain of 311,000 was also revised in Friday’s report, to 312,000.
Over the entire first quarter of the year, job gains averaged 180,000 per month, well below the 233,000 average monthly gain for all of 2018.
Gad Levanon, the chief economist for North America at The Conference Board, a non-partisan think tank, said with Friday’s report, “concerns about an imminent major employment slowdown after the abysmal February job numbers are muted for now.”
However, he also said the March report includes a few warning signs about the future.
“First, the number of jobs in the temporary help industry, one of the most reliable leading indicators of employment, declined again in March and has declined by about one percent in the past three months, a pattern often associated with economic slowdowns,” he said.
“Second, manufacturing employment is down versus two months ago, the first time that has happened since the 2015-16 manufacturing recession,” Levanon said. “In addition, average weekly hours in manufacturing is clearly on a negative trend, raising additional concerns about another manufacturing recession.”
Wage gains fell off the recent strong pace, increasing just 0.14 percent in March and 3.2 percent year over year, the Bureau said.
The average work week increased by 0.1 hour to 34.5 hours.
While the 3.8 percent figure for the unemployment rate will be the figure most quoted in the media, it’s instructive to look at other measures the bureau relies on when gauging job market activity.
The figure we all know is, in technical terms, called the U-3 rate. It is defined as “total unemployment as a percent of the civilian labor force.”
The actual scale, as depicted on the bureau’s “alternative measures of labor underutilization” page, runs from U-1 to U-6, with the U-6 measure encompassing the “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.”
Yes, that’s a bureaucratic mouthful. Essentially, it’s a measure of unemployment that includes discouraged workers who are currently opting out of looking for a job, as well as those holding part-time jobs and have yet to find full-time work.
For the month of March, the U-6 unemployment rate held steady at 7.3 percent, the same number as February, but well below January’s 8.1 percent.
“Overall, the US economy is still adding jobs at a solid pace, but job growth is likely to slow down in the coming months,” The Conference Board’s Levanon said. “Given the stagnation in the working-age population, even this more modest job growth is still likely to continue to tighten the labor market, beyond the very low 3.8 percent unemployment rate.”
Economists are now forecasting the U.S. economy will expand roughly 2 percent to 2.5 percent this year, down from 2.9 percent last year.
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