March jobs report shows divergence between households and companies

Posted April 21, 2017

Overall nonfarm payrolls rose by 98,000 jobs, the slowest pace in almost a year, though the unemployment rate dropped to 4.5%, its lowest since May of 2007, the U.S. Bureau of Labor Statistics reported Friday.

Most analysts expect hiring to return to a pace closer to 178,000, the average monthly job gain for the past three months and close to the solid monthly average for 2016.

KEY DRIVERS: The recovery from the Great Recession is almost eight years old, with the unemployment rate down to a healthy 4.7 percent. The two-tenths of a percentage point drop in the unemployment rate from 4.7 percent in February took it to its lowest level since May 2007.

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However, amid falling unemployment, hourly wages forged higher, adding 0.2 per cent over February in another sign of a tightening labour market.

President Trump has set a lofty goal of creating 25 million jobs over the next decade, and so far 317,000 jobs have been added in his first two full months in office.

"After the unseasonably warm January and February, which pushed monthly job gains back above 200,000, there was always going to be some pay back in March, when the weather snapped back to seasonal norms, including some heavy snowstorms", wrote Paul Ashworth, chief US economist for Capital Economics.

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In Buckingham County, the unemployment rate decreased from 6.9 percent in January to 6.2 percent in February. Economists had expected a decline in hiring in March after job gains in January and February had averaged a robust 218,000. The March figure is a drop from the 2.8 percent nominal annual wage growth recorded in February. Construction added 8,900 jobs.

The four-week moving average of initial claims, a less-volatile measure of labor market trends, rose by 4,500 to 250,000 last week.

Indeed chief economist Jed Kolko puts it this way: "It's not just that the unemployment rate was down, it was down for the right reason, which is that more people were getting back to work". Retail lost a significant number of jobs in March, 29,700, after losing 26,000 in February, a potential fallout of continued trouble in the sector. During the past 12 months, the number of long-term unemployed people has declined by 526,000. The private service-providing sector, at 3,828,700, increased 9,200.

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