March Jobs Report: Unemployment Rate Falls but Hiring Slows
It was an off month for the labor market as struggling retailers employ fewer workers.
Employment growth unexpectedly slowed in March, hurt in part by job losses in the retail industry. But even as the number of new jobs created came in well short of what economists were looking for, the unemployment rate beat expectations to hit levels not seen in 10 years.
The March jobs report from the Labor Department revealed that the economy created just 98,000 jobs in March. Economists, on average, were expecting jobs growth of 175,000, according to a survey by Econoday.
The unemployment rate, which is derived from a separate survey, dropped to 4.5% against expectations for 4.7%. The number of long-term unemployed folks was unchanged at 1.7 million, and the number of those working part-time who wanted to work full-time barely budged at 5.6 million.
Employment increased in professional and business services and in mining, but that couldn't offset shrinking employment in the retail sector. Several prominent national chains have been closing stores this year.
Wage gains for nonsupervisory workers rose 4 cents to $21.90 in March. Nonsupervisory workers comprise four-fifths of the workforce, and their wage gains are more likely to be reflected in prices and consumer spending. Adding in supervisors and executives, hourly earnings added 5 cents to $26.14.
Kiplinger's economic outlook expects the job market to continue to tighten this year as demand for skilled workers exceeds availability. Employment growth in 2017 should slow to an average of 180,000 jobs per month, from 187,000 per month in 2016, but the unemployment rate will be around 4.5%. The four-week average of initial unemployment claims is still near its lowest level since 1973, limiting the additions from this source to the ranks of the unemployed.
Furthermore, the number of first-time filers for unemployment benefits continues to trend lower. For the week ended April 1, the number of newly unemployed workers fell to 234,000, a decrease of 25,000 from the previous week's revised level of 259,000. The four-week moving average was 250,000, a decrease of 4,500 from the previous week's revised average. Weekly initial jobless claims are tracking at levels last seen in 1973, according to the Federal Reserve.