The monthly nonfarm payrolls data for the month of March was released last Friday by the U.S. department of labor. Official data showed that the U.S. economy created the smallest pace of jobs in six months which was driven by mild weather. However, wage growth was seen strengthening only slightly which was seen as a positive sign amid a broadly weaker payrolls report.
The monthly nonfarm payrolls for March was seen rising just 103,000 during the month with sectors such as construction and retail losing the most number of jobs. The March payrolls report was the weakest since last year September’s payrolls data, when the U.S. economy was battered by the hurricanes which led to a weaker payrolls print.
The fewer number of jobs for the month of March stood in stark contrast to the robust payrolls report created in February. Revisions showed that February’s nonfarm payrolls were revised higher to show 326,000 jobs being added during the month.
March payrolls below quarterly average
The month of March is seasonally known to be a weak period on the jobs front, with the weather also influencing the report. Job growth was seen moderating especially as the U.S. labor market was at full employment. While there still remains some slack in the labor force, data showed that employers were struggling to find qualified workers especially in the construction and manufacturing sectors.
With the March payrolls report, the average payrolls for the first quarter was seen at 202,000 and the March print was weaker than the quarter’s average.
Still, despite the weak patch, the first quarter average payrolls was significantly higher compared to the 182k average jobs created last y ear.
According to some estimates, at the current level, U.S. employers need to add only 100k jobs in order to keep up with the growth and the working age population.
U.S. unemployment rate steady at 4.1%
The unemployment rate was forecast to fall to 4.0% by economists. However, the U.S. unemployment rate was unchanged at 4.1% which still marked a record low.
A broader measure of unemployment known as the underemployment rate also declined. The underemployment rate also factors in people who want to work but gave up looking for job and people working part-time due to lack of full time job fell to 8% during the month.
The Federal Reserve had previously forecast that there was still room for the U.S. unemployment rate to fall and forecast an average unemployment rate below 4.0% in the medium term.
U.S. average hourly earnings rises 0.3%
The average hourly earnings data for March picked up slightly so show a 0.3% increase on a month over month basis. This was higher than February’s wage growth of 0.1% and matched the economists’ forecasts. On an annual basis, the average hourly earnings edged modestly higher from 2.6% in February to 2.7% in March.
The modest increase in wage growth was seen as a positive amid a mostly negative data for March in the labor market.
Manufacturing jobs rises. Construction and retail sector loses jobs
The payrolls data showed that the manufacturing sector added 22,000 jobs during the month as the sector continued to strongly contribute to the monthly payrolls. Construction and retail sectors saw major job losses.
Employment increased in mining, oil industry and healthcare.
The release of the payrolls report saw the U.S. dollar giving up some of the gains by Friday’s close. Equity markets attempted to post some gains as the payrolls data soothed nerves that the Federal Reserve will most likely stick to its rate hike plans of just two more rate hikes this year.