U.S. March Employment: What You Need to Know

Posted on 03/09/2017 10:24 AM

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March Nonfarm Payrolls: 215,000

Expectations: 210,000

What drove the increase: Retail trade, construction and health care all registered job gains while manufacturing and mining reported declines.

Retail trade added 48,000 jobs in March, resulting in a cumulative increase of 378,000 over the past 12 months. Construction jobs rose 37,000 in March while another 37,000 health care jobs were added. The health care industry has added 503,000 jobs the past 12 months.

But the oil industry and mining sector is still losing jobs. Mining (includes the oil industry) saw additional job declines with another 12,000 jobs lost. Since Sept. 2014, the sector has shed 185,000 jobs.

Manufacturing employment dropped 29,000, with most of the decline centered in the durable goods industry.

With revisions to February -- gains were revised up to 245,000 (242,000 prior) and January – revised down to 168,000 (172,000 prior) – there was a net decline of 1,000 for the two months. Over the past three months, job gains have averaged 209,000 per month.

March Unemployment: 5.0%

Expectations: 4.9%

Behind the increase: The number of long-term unemployed (those jobless for 27 weeks or more) was

essentially unchanged at 2.2 million in March and has shown little movement since  June. In March, these individuals accounted for 27.6% of the unemployed.

In March, the labor force participation rate ticked up to 63.0% from 62.9% in Feb., putting it at the highest level since March 2014 when it was last at 63% or above at 63.2%. The employment-population ratio at 59.9% was little changed as it stood at 59.8% in February.

The broadest measure of unemployed workers ticked slightly upward on a seasonally adjusted measure, rising to 9.8% from 9.7% in February. The unadjusted figure was 9.9%, compared with 10.1% in February.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) was about unchanged in March at 6.1 million and  has shown little movement since November.

In March, 1.7 million persons were marginally attached to the labor force, down by 335,000 from a year earlier.

Other highlights:

Wage increases were noted, with average hourly earnings up 7 cents, or 0.2%, to $25.43 per hour compared to February. However, this marked an increase of 2.3% from year-ago.

The average workweek held steady at 34.4 hours.

Comments: The report is a little stronger than expected, but market reaction immediately following the data release was relatively muted with the 10-year US Treasury note yield rising slightly and gold futures easing slightly lower. The uptick in the unemployment rate is not emerging as a major concern point as the labor force participation rate also ticked higher, with the latter a signal more folks have joined the job market. The rise in the unemployment rate also signals that more are looking for employment at this stage. The increase in wages noted in the data may provide some relief for Fed members, but their focus remains on the global market/economic situation as data thus far have provided little concern on the US jobs front.

 

There's nothing in this report that really shifts the expectations on future interest rate moves by the Fed at this stage – April is not expected and even June remains a question mark. The Fed funds futures are signaling a 30% chance for a June rise, up from 23% prior to the jobs data release. So an as-expected jobs report still has not shifted the economic landscape enough to alter expectations at this stage, and with no additional job updates ahead of the April FOMC session, it will take a significant shift in other data to move the needle much on expectations for action by the Fed.

   

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