March’s US Jobs Numbers Disappoint, but Unemployment Falls

March’s US Jobs Numbers Disappoint, but Unemployment Falls

The US economy added 98,000 jobs in the month of March, while the unemployment rate declined from 4.7 to 4.5 percent and the average hourly wage grew by 0.2 percent month-over-month, according to the latest jobs report released Friday by the Bureau of Labor Statistics. The number of new jobs fell well short of expectations, according to the New York Times, as economists had expected a figure around 180,000:

Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this was the weakest showing for the economy in nearly a year. Although it represents just one month’s data, it will raise questions about whether improving business sentiment is actually translating into any meaningful action by employers. On the other hand, at 4.5 percent in March, the unemployment rate is at its lowest point since May 2007, marking a milestone in the long road back from the Great Recession.

The robust numbers in January and February led some analysts to conclude that the economy was benefiting from a “Trump bump” after President Trump’s election, but hard data to support that argument has been scarce. … The latest report will only add to the debate over whether so-called soft data, like stronger sentiment among businesses, is actually prompting companies to hire more workers. March’s data suggests it isn’t, as does the 38,000 downward revision in estimated job creation in February and March.

At the Wall Street Journal’s live-blog, Ben Eisen points out that “the disappointing headline numbers … wouldn’t have been so notable if wage growth was stronger”:

Rising pay is typically a sign that strong hiring is flowing through to the rest of the economy, but some economists lament that we’re still not seeing enough of that. “Proclamations that the job market is tight are not being affirmed by the wage growth story, or lack thereof,” Mark Hamrick, Bankrate.com’s senior economic analyst. “Average hourly earnings are up 2.7%, still failing to edge above the 3% level that we’d associate with a stronger recovery. “

Yet Bloomberg’s Michelle Jamrisko hears from another economist who is more confident that Friday’s figures show the labor market tightening:

While the payroll figures are the weakest since last May and represent a pullback from the first two months of the year, it may reflect that things are getting back to normal. Employment has been on a healthy run, giving Federal Reserve policy makers enough confidence to raise interest rates in March and forecast two more hikes this year. Businesses have been challenged by a dwindling pool of unemployed, and are gradually giving in to pressures to raise wages in order to attract and retain talent.

“Even if payrolls are slowing down, I’m not sure that that means the labor market is weakening,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “To the extent that it is slowing down or going to slow down, it’s probably more a function of tight supply than weakening demand.”

Meanwhile, the number of applications for unemployment benefits declined last week, the Associated Press reports, also suggestive of a tight labor market:

Weekly applications for unemployment aid plunged 25,000 to a seasonally adjusted 234,000, the Labor Department said Thursday. The four-week average, a less volatile measure, dipped to 250,000. Over the past year, the number of people collecting benefits had tumbled 7.2 percent to 2.03 million.

U.S. workers face a lower risk of losing their jobs, since applications are a proxy for layoffs. The weekly figure has remained below 300,000, a level linked with job growth, for 109 weeks. That’s the longest such stretch since 1970, when the U.S. population was much smaller.