Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, leisure and hospitality, and mining. Employment in manufacturing continued to trend up.From Bloomberg:
The U.S. economy added more jobs than forecast in March and the unemployment rate unexpectedly declined to a two-year low of 8.8 percent, a sign the labor- market recovery is gathering speed.
Payrolls increased by 216,000 workers last month after a revised 194,000 gain the prior month, the Labor Department said today in Washington. Economists projected a March gain of 190,000, according to the median estimate in a Bloomberg News survey. The jobless rate dropped from 8.9 percent in February, the fourth straight decrease.
Record exports and gains in business and consumer spending are prompting companies like Chrysler Group LLC and Kohl’s Corp. (KSS) to boost staff, helping the U.S. weather the highest energy prices in more than two years. The improving economy encouraged Federal Reserve policy makers last month to signal they were unlikely to extend bond purchases beyond June.
“This is consistent with a labor market recovery that is broadening,” Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, said before the report. “We’re starting to see more and more small businesses participating in hiring. That’s providing the foundation of a self-sustaining recovery.”
Payroll estimates in the Bloomberg survey of 83 economists ranged from gains of 150,000 to 295,000. February was revised up from a previously reported gain of 192,000, while January payrolls increased 68,000 after a prior estimate of 63,000. The unemployment rate was projected to hold at 8.9 percent, according to the survey median.
While companies stepped up hiring, earnings and hours stagnated.
I want to highlight some points not made in the articles.
In the last year, the civilian labor force ("The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.") has decreased by 489,000. Over the same period, the civilian non-institutional population has increase by 1.8 million. This is very important from a mathematical perspective as it indicates people are leaving the labor force, or are "not in the labor force." This DOES NOT MEAN THEY HAVE GIVEN UP LOOKING FOR WORK. They could be back in school or retired (considering the baby boomers are now retiring at a pace of 10,000 day this is a very interesting number). What I find interesting about the statistic is the numerator has decreased, indicating the total number of people employed and unemployed over the last year has decreased.
According to the household survey, total employment has increase by 912,000 over the last year or a pace of 76,000/month. Over the same period, the establishment survey has increased by 1.3 million or 108,000 month. Neither of these paces is particularly inspiring. However, remember at the end of last Spring the economy experienced a slowdown caused by the BP oil spill and the EU situation.
Over the last year (March 2010 to March 2011), average weekly earnings have increased 2.33% (increasing from $766.57 to $784.44). This has occurred because of an increase in wages (from $22.48 to $22.87) and an increase in hours worked (from 34.1 to 34.3).
Consider these two charts from the report (click for a larger image):
The employment situation is clearly improving.
NDD here with a few additional comments:
Two months ago, when we got the “disappointing” January report, noting the relentless upward revisions to the BLS’s initial payroll reports for the last year, I said that
There is thus every reason to believe that January's "disappointing" +36,000 job report will be less disappointing in two months' time
Two months later, the final revision puts January’s report at +68,000.
I have also been pointing out that, averaging by quarter, it is obvious that the jobs picture has been continually improving. Here is how that trend stands with the first quarter of 2011 behind us:
|Quarter||Average Job gain/loss|
As I said a month ago, the jobs recovery is proving to be a long, slow, hard slog, but we are still improving.
Government layoffs continue to be the one big black eye. Over the last 3 months, 86,000 government jobs have been lost.
Finally, a month ago I noted that something is going on with the Latino population - possibly including substantial repatriation back to the home countries of many immigrants - noting that the unemployment rate for this group is dropping like a stone (from 13.2% in November to 11.6% in February), but almost entirely due to dropping out of the labor force. On a preliminary reading, that trend continued in March, with Latino unemployment dropping to 11.3%.
I share Bonddad’s overall assessment – this was a good report.