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Jobs Report: U.S. Adds 126,000 Jobs; Unemployment Steady at 5.5%
Monthly gain is lowest since December 2013 as first quarter ends with a stumble
y BEN LEUBSDORF
Updated April 3, 2015 10:39 a.m. ET383 COMMENTS
U.S. employers sharply slowed their hiring in March to the weakest pace in more than a year, the latest sign that the economy stumbled during a first quarter hampered at least in part by harsh winter weather.
Nonfarm payrolls rose by a seasonally adjusted 126,000 jobs in March, the Labor Department said Friday. That was the smallest gain since December 2013. The average monthly gain in the first quarter was 197,000, down from an average of 324,000 in the final three months of 2014.
The unemployment rate, derived from a separate survey of households, was unchanged in March at 5.5%. Wages, meanwhile, rose at a moderate pace.
Details of the report showed a dip in workforce participation and slower hiring across most sectors, not just industries like construction that are sensitive to the impact of winter weather.
“The overall tone of this report was quite weak and it underscores the slowdown in domestic growth momentum, as the recovery continues to navigate again the headwinds coming from the harsh winter conditions, the strong dollar and the weak global backdrop,” TD Securities economist Millan Mulraine said in a note to clients.
But Paul Ashworth, chief U.S. economist at Capital Economics, urged a more circumspect take. “Payrolls are always volatile even at the best of times and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer,” he said in a note to clients.
Based on other labor-market indicators, Mr. Ashworth said, “this is most probably another temporary blip, like the ones we saw in mid-2012 and late 2013.”Economists surveyed by The Wall Street Journal had expected payrolls to rise a much stronger 248,000 in March, and predicted the unemployment rate would be steady at 5.5%.
Last month’s soft job numbers are a signal that the labor market, after a year of robust improvement, may be decelerating amid other evidence of a broad slowdown in economic growth during the first quarter of 2015.
Gross domestic product, the broadest measure of goods and services produced across the economy, expanded at an impressive 5% pace in the third quarter last year, then slowed to a 2.2% growth rate in the fourth quarter. Closelywatched gauges of consumer spending, business investment and manufacturing output have all pointed to a further slowdown in the first quarter, which ended earlier this week.
The Commerce Department will release its first official estimate for first-quarter GDP on April 29. Forecaster Macroeconomic Advisers on Thursday predicted growth at a 1.2% pace in the first three months of the year, while J.P. Morgan Chase estimated growth at a 0.6% rate.
Full coverage and analysis of the March employment report. Current jobless rate: 5.5%. Photo: Getty
Growth on the jobs front was mixed across sectors. The construction, mining, manufacturing and state and federal government sectors shed jobs. Retailers, health-care employers and the professional and business services sectors added positions.
The mining and logging industry, which includes oil and gas extraction, lost 11,000 jobs in March and has shed 30,000 positions so far in 2015. A plunge in global oil prices since mid-2014 has squeezed U.S. drillers and other firms in the energy sector and related industries.
Average hourly earnings of private sector workers rose by 7 cents, or 0.3%, to $24.86 in March. Economists had expected a 0.2% rise in wages from February. From a year earlier, hourly earnings rose 2.1% in March, roughly in line with the 2% annual pace of recent years.
Joshua Shapiro, MFR Inc.’s chief U.S. economist, said the “one bright spot” in Friday’s report was the jump in wages from February. But, he warned in a note to clients, “this is a volatile number and not much can be concluded from a single result.”
A slew of big companies, including Wal-Mart Stores Inc. and Target Corp., have announced pay raises in recent months. McDonald’s Corp. on Wednesday said it will begin to increase pay this summer for some 90,000 workers at the roughly 1,500 U.S. restaurants it operates, though the wage increase doesn’t apply to the majority of restaurants that are operated by franchisees.
The Federal Reserve has acknowledged the recent economic slowdown, but hasn’t expressed serious concern as it mulls when to move forward with a rate increase. “We do see considerable underlying strength in the U.S. economy and in spite of what looks like a weaker first quarter, we are projecting good performance for the economy,” Fed Chairwoman Janet Yellen told reporters in mid-March.
U.S. economic output briefly contracted in the first quarter of last year before it rebounded strongly in the spring and summer. The labor market stumbled for a couple months, but regained its footing by the spring and posted payroll gains in excess of 200,000 every month for 12 straight months—until March.
Harsh winter weather across much of the eastern U.S. may be a factor now, just as it was a year ago. Employers added an average of 193,000 jobs a month in the first quarter of 2014, similar to the 197,000 monthly average for the first quarter of 2015.
Recent strong hiring and a steady decline in the jobless rate have raised expectations that the Fed will begin raising short-term interest rates this year, despite the fact that U.S. inflation has undershot the central bank’s 2% annual target for nearly three years.
The Fed’s policy-making committee last month said that, assuming the labor market continues to improve, it will raise rates when officials are “reasonably confident” that inflation will move back toward 2%.
That could mean a rate increase as soon as the Fed’s June 16-17 policy meeting. Friday’s weak hiring number and other mixed data may give some officials pause, though by June they’ll have two more months of employment data on hand.
The monthly jobs numbers can be volatile and are subject to revision over time. Friday’s report showed weaker hiring in recent months than earlier estimated. Payrolls rose by 264,000 in February compared with an earlier estimate of 295,000, and January’s gain was 201,000 versus an earlier estimate of 239,000.
The average workweek fell in March by 0.1 hour, to 34.5 hours.
Participation in the labor force ticked down last month. The labor force participation rate in March was 62.7%, down from 62.8% the prior month and matching its lowest level since 1978. The participation has been little changed over the last year.
The employment-population ratio was 59.3% last month, unchanged from February but up from 59.0 in March 2014.
A broader version of the unemployment rate known as the U-6, which includes people working part-time jobs because they can’t find full-time work and so-called marginally attached workers, was 10.9% in March, ticking down from 11% in February.
Monthly gain is lowest since December 2013 as first quarter ends with a stumble
y BEN LEUBSDORF
Updated April 3, 2015 10:39 a.m. ET383 COMMENTS
U.S. employers sharply slowed their hiring in March to the weakest pace in more than a year, the latest sign that the economy stumbled during a first quarter hampered at least in part by harsh winter weather.
Nonfarm payrolls rose by a seasonally adjusted 126,000 jobs in March, the Labor Department said Friday. That was the smallest gain since December 2013. The average monthly gain in the first quarter was 197,000, down from an average of 324,000 in the final three months of 2014.
The unemployment rate, derived from a separate survey of households, was unchanged in March at 5.5%. Wages, meanwhile, rose at a moderate pace.
Details of the report showed a dip in workforce participation and slower hiring across most sectors, not just industries like construction that are sensitive to the impact of winter weather.
“The overall tone of this report was quite weak and it underscores the slowdown in domestic growth momentum, as the recovery continues to navigate again the headwinds coming from the harsh winter conditions, the strong dollar and the weak global backdrop,” TD Securities economist Millan Mulraine said in a note to clients.
But Paul Ashworth, chief U.S. economist at Capital Economics, urged a more circumspect take. “Payrolls are always volatile even at the best of times and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer,” he said in a note to clients.
Based on other labor-market indicators, Mr. Ashworth said, “this is most probably another temporary blip, like the ones we saw in mid-2012 and late 2013.”Economists surveyed by The Wall Street Journal had expected payrolls to rise a much stronger 248,000 in March, and predicted the unemployment rate would be steady at 5.5%.
Last month’s soft job numbers are a signal that the labor market, after a year of robust improvement, may be decelerating amid other evidence of a broad slowdown in economic growth during the first quarter of 2015.
Gross domestic product, the broadest measure of goods and services produced across the economy, expanded at an impressive 5% pace in the third quarter last year, then slowed to a 2.2% growth rate in the fourth quarter. Closelywatched gauges of consumer spending, business investment and manufacturing output have all pointed to a further slowdown in the first quarter, which ended earlier this week.
The Commerce Department will release its first official estimate for first-quarter GDP on April 29. Forecaster Macroeconomic Advisers on Thursday predicted growth at a 1.2% pace in the first three months of the year, while J.P. Morgan Chase estimated growth at a 0.6% rate.
Full coverage and analysis of the March employment report. Current jobless rate: 5.5%. Photo: Getty
Growth on the jobs front was mixed across sectors. The construction, mining, manufacturing and state and federal government sectors shed jobs. Retailers, health-care employers and the professional and business services sectors added positions.
The mining and logging industry, which includes oil and gas extraction, lost 11,000 jobs in March and has shed 30,000 positions so far in 2015. A plunge in global oil prices since mid-2014 has squeezed U.S. drillers and other firms in the energy sector and related industries.
Average hourly earnings of private sector workers rose by 7 cents, or 0.3%, to $24.86 in March. Economists had expected a 0.2% rise in wages from February. From a year earlier, hourly earnings rose 2.1% in March, roughly in line with the 2% annual pace of recent years.
Joshua Shapiro, MFR Inc.’s chief U.S. economist, said the “one bright spot” in Friday’s report was the jump in wages from February. But, he warned in a note to clients, “this is a volatile number and not much can be concluded from a single result.”
A slew of big companies, including Wal-Mart Stores Inc. and Target Corp., have announced pay raises in recent months. McDonald’s Corp. on Wednesday said it will begin to increase pay this summer for some 90,000 workers at the roughly 1,500 U.S. restaurants it operates, though the wage increase doesn’t apply to the majority of restaurants that are operated by franchisees.
The Federal Reserve has acknowledged the recent economic slowdown, but hasn’t expressed serious concern as it mulls when to move forward with a rate increase. “We do see considerable underlying strength in the U.S. economy and in spite of what looks like a weaker first quarter, we are projecting good performance for the economy,” Fed Chairwoman Janet Yellen told reporters in mid-March.
U.S. economic output briefly contracted in the first quarter of last year before it rebounded strongly in the spring and summer. The labor market stumbled for a couple months, but regained its footing by the spring and posted payroll gains in excess of 200,000 every month for 12 straight months—until March.
Harsh winter weather across much of the eastern U.S. may be a factor now, just as it was a year ago. Employers added an average of 193,000 jobs a month in the first quarter of 2014, similar to the 197,000 monthly average for the first quarter of 2015.
Recent strong hiring and a steady decline in the jobless rate have raised expectations that the Fed will begin raising short-term interest rates this year, despite the fact that U.S. inflation has undershot the central bank’s 2% annual target for nearly three years.
The Fed’s policy-making committee last month said that, assuming the labor market continues to improve, it will raise rates when officials are “reasonably confident” that inflation will move back toward 2%.
That could mean a rate increase as soon as the Fed’s June 16-17 policy meeting. Friday’s weak hiring number and other mixed data may give some officials pause, though by June they’ll have two more months of employment data on hand.
The monthly jobs numbers can be volatile and are subject to revision over time. Friday’s report showed weaker hiring in recent months than earlier estimated. Payrolls rose by 264,000 in February compared with an earlier estimate of 295,000, and January’s gain was 201,000 versus an earlier estimate of 239,000.
The average workweek fell in March by 0.1 hour, to 34.5 hours.
Participation in the labor force ticked down last month. The labor force participation rate in March was 62.7%, down from 62.8% the prior month and matching its lowest level since 1978. The participation has been little changed over the last year.
The employment-population ratio was 59.3% last month, unchanged from February but up from 59.0 in March 2014.
A broader version of the unemployment rate known as the U-6, which includes people working part-time jobs because they can’t find full-time work and so-called marginally attached workers, was 10.9% in March, ticking down from 11% in February.
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