Employment Situation



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In mixed results, March payroll growth of 103,000 is well below expectations but wage indications from average hourly earnings do show a little pressure as was expected, up 0.3 percent on the month with the year-on-year rate up 1 tenth to 2.7 percent. The unemployment rate did not move down which was the consensus, instead holding steady at what is still a very low 4.1 percent.

Looking first at payroll growth, February and January have been revised with a net of minus 50,000 the result. The first quarter average of 202,000 is a bit below the fourth quarter’s 221,000. The breakdown for March shows another very strong showing for manufacturing, up 22,000 which hits Econoday’s consensus, and with professional & business services, a key component for tracking labor demand, rising a respectable 33,000. Yet the temporary help subcomponent for this reading fell 1,000 after rising 21,000 in February. And construction payrolls, which have been on the rise, fell 15,000. Retail also fell, down 4,000 in the month.

Judging by today’s results, the labor market wasn’t quite as hot as previously expected which turns down concern over wages even though those pressures did rise tangibly in March. On net, the March employment report will not likely turn up the heat on the Federal Reserve to increase its pace of rate tightenings.

Consensus Outlook 

After two months of standout strength, cooling is Econoday’s consensus for March nonfarm payrolls which are nevertheless seen rising a very respectable 175,000. And movement is the call for the unemployment rate which is expected to fall 1 tenth further to 4.0 percent which would increasingly point to full employment and the risk of wage inflation. And wages are expected to show limited pressure in March’s report with the monthly consensus for average hourly earnings at a noticeable 0.3 percent with the yearly rate seen moving up a tick to 2.7 percent. Private payrolls, like nonfarm payrolls, are expected to rise 175,000 with manufacturing payrolls expected to increase 20,000. The workweek is seen unchanged at 34.5 hours and the labor participation rate, which jumped in February, expected to come back 2 tenths to 62.8 percent.









Trading Economics 

Bureau of Labor Statistics 



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