United States: Payrolls growth stutters, unemployment holds at 5.5%
April 3, 2015
Non-farm payrolls grew by 126,000 in March, which was less than half February’s downward revised increase of 264,000 (previously reported: +295,000). Moreover, the reading undershot market expectations of a 247,000 increase in payrolls and marked the weakest gain since December 2013. Prior to March, non-farm payrolls had tallied 12 consecutive months of gains above 200,000, the longest such streak since the mid-1990s.
The private sector was entirely responsible for new hiring, having added 129,000 jobs in March. The largest gains were registered in professional and business services, education and healthcare, and retail. The public sector shed 3,000 jobs. The U.S. economy now has 2.8 million more people employed than at the pre-crisis January 2008 peak.
The unemployment rate—derived from a different survey—held at February’s 5.5% in March, which marks the best result since May 2008. The print was in line with market expectations. The drop to 5.5% in February brought the unemployment rate into the Fed’s target zone of 5.2%-5-5%. However, the labor market may not be as strong as the headline numbers suggest. Labor participation rates still remain notably low and while average hourly earnings inched up in March, wage growth has been largely stagnant over the past months.
Author: Carl Kelly, Economist