U.S. Payrolls Increased 215,000 in March

Employment in the U.S. climbed and wages picked up in March, signs of labor-market durability in the face of lethargic global growth.

The 215,000 gain in payrolls followed a revised 245,000 February advance, a Labor Department report showed Friday. Average hourly earnings increased 0.3 percent from a month earlier, while the jobless rate crept up to 5 percent as more people entered the labor force.

A still-robust pace of job creation represents a vote of confidence by employers that the U.S. will hold up against an anemic global economic backdrop. Additional tightening in the labor market that sparks bigger pay gains for American workers may convince Federal Reserve policy makers that the economy is more insulated to weakness overseas.

“We’ve been through some rough patches, but we continue to generate a lot of jobs,” said Ward McCarthy, chief financial economist at Jefferies LLC in New York, who correctly forecast the gain in payrolls. “In a consumer-driven economy, that’s going to keep us headed in the right direction.”

Construction payroll growth accelerated in March, while manufacturing employment slumped by the most since December 2009. Other industries adding jobs included retail, health care, leisure and hospitality and professional services. Government hiring was the strongest since August.

The median forecast in a Bloomberg survey called for a 205,000 advance in total employment, with estimates ranging from gains of 100,000 to 250,000 after a previously reported 242,000 February increase. Revisions to prior reports subtracted a total of 1,000 jobs to overall payrolls in the previous two months.

The unemployment rate, which is derived from a separate Labor Department survey of households, picked up last month from 4.9 percent in February.

The details showed that some people entering the labor force were only able to find part-time employment. The number of Americans working part-time for economic reasons rose by 135,000 to 6.12 million, the highest since August.
That pushed up the broadest measure of unemployment, which also includes discouraged workers, to 9.8 percent from 9.7 percent.

Participation Rate

The labor force participation rate, which indicates the share of working-age people who are employed or looking for work, rose to 63 percent, the highest since March 2014.

Wage growth rebounded from a month earlier with average hourly earnings rising more than economists forecast after a 0.1 percent drop. The year-over-year increase was 2.3 percent.

The labor market is plugging along its best two years for job growth since 1998-1999. While leading Democrat presidential candidate Hillary Clinton can acknowledge the improvement under her party’s leadership, Republican front-runner Donald Trump is encouraging voters to focus on trade agreements and companies moving operations overseas.

The average work week for all private workers was unchanged at 34.4 hours in March.

Employment at construction companies rose by 37,000, the most in three months and possibly boosted by warmer weather. Manufacturing payrolls dropped by a whopping 29,000.

Federal Reserve

U.S. central bankers have signaled their intent to keep monetary policy accommodative, with Fed Chair Janet Yellen saying this week it’s appropriate to “proceed cautiously” in raising interest rates due to the global economy. She noted China’s transition to a domestically-driven economy and the outlook for commodity prices as potential risks.
“On balance, overall employment has continued to grow at a solid pace so far this year, in part because domestic household spending has been sufficiently strong to offset the drag coming from abroad,” Yellen said in the March 29 speech.

“Looking forward however, we have to take into account the potential fallout from recent global economic and financial developments, which have been marked by bouts of turbulence since the turn of the year,” Yellen said.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
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