Economy Adds a Disappointing 103K jobs in March; Unemployment Rate remains 4.1% but Earnings Improve

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 103,000 in March, smallest monthly increase in jobs since September’s hurricane-impacted 14,000;
  • Private sector jobs INCREASED 102,000;
  • Prior month job totals REVISED DOWN net 50,000: UP 13,000 in February to a growth of 326,000 jobs (from 313,000) but DOWN 63,000 in January to a gain of 176,000 (from the last report of a 239,000 increase);
  • Average weekly earnings ROSE $2.76 to $925.29, a 3.2 percent year-year gain;
  • Unemployment rate in March remained at 4.1 percent for the sixth straight month; number of persons unemployed FELL 121,000 but number of person employed also FELL 37,000;
  • Average hourly earnings GREW 8¢, in March a 2.6 percent annual increase after a 2.5 percent year-year boost in February;
  • Average weekly hours REMAINED at 34.5 in March;
  • Labor force – DROPPED 158,000 in March after a jump of 806,000 in February;
  • The number of persons NOT in the labor force INCREASED 323,000; labor force participation rate FELL BACK 0.1 percentage points to 62.9 percent;
  • Employment-Population ratio REMAINED at 60.4 percent,
  • Number of construction jobs FELL 15,000, with 7,000 fewer residential construction jobs;
  • Retail sector SHED 4,400 jobs;

Trends:

  • The 3.2 percent (year-year) increase in average weekly earnings was the strongest since August 2010 (3.4 percent)
  • First quarter saw 605,000 new payroll jobs, up from 532,000 gain in 1Q 2017
  • Number of full-time jobs DROPPED 311,000 in March, largest month-month decline since last May (357,000)
  • Part time jobs represented 18.0 percent of employment, up 0.3 percentage points – largest month-month increase since last October
  • Number of new entrants to the labor force (as unemployed) was 625,000 in March, down from 704,000 in February;
  • Unemployment rate for Blacks dropped back to 6.9 percent in February just above the record low of 6.8 percent recorded in December (rate had increased to 7.7 percent in January);

Data Source Bureau of Labor Statistics

Image result for labor market

Color the labor picture blue in March as both employment and new entrants to the labor force dropped suggesting discouragement among workers.

Even the good news in the report, a relatively robust increase in average weekly earnings came with a discouraging word: earnings rose because the two lowest paying job sectors – retail and leisure-hospitality – added a combined 600 jobs compared with an average gain of 34,600 in the past three months.

There were some nuggets suggesting optimism: the unemployment rate among Blacks was 6.9 percent as it had been in February. That’s the second lowest unemployment rate among Blacks – who have been among the first to suffer in a struggling economy –in history. The Black unemployment rate dropped to 6.8 percent last December.

The March report came too soon after President Trump’s announcement of higher tariffs to suggest they may have contributed to the disappointing job numbers. However, the drop in residential construction jobs – the first since last September – could be directly attributed to the new tax laws which reduced the tax incentive for homeownership.  Indeed, residential construction jobs slipped by 7,000 in March after increasing an average of 20,000 a month in the last five months. (Then too, the weather may have played a role: since the end of the recession, residential construction jobs have increased in March four time, declined three times and were unchanged once.)

The drop in retail jobs came primarily at department stores which announced cuts following a disappointing holiday shopping season. Even the boost in take-home pay resulting from the tax code changes didn’t help.

The number of temp jobs – often considered a leading indicator for all jobs – fell 600 in March compared with a three-month average gain of 6,200.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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