Will The Labor Market Put The Brakes On The U.S. Economic Recovery?
March served up another heaping pile of disappointing jobs data on Friday morning. The employment situation report, issued by the Bureau of Labor Statistics, showed that the United States added just 88,000 non-farm payrolls for the month. This is less than half of consensus estimates for about 200,000 additions, and about a third of February’s upwardly-revised figure of 268,000.
The headline U-3 unemployment rate did drop from 7.7 to 7.6 percent, but this does not necessarily reflect job growth. In this case — highlighted by tremendously poor payroll growth — the reduction in the unemployment rate is due to a drop in labor force participation. According to the report: “The civilian labor force declined by 496,000 over the month, and the labor force participation rate decreased by 0.2 percentage point to 63.3 percent. The employment- population ratio, at 58.5 percent, changed little.”
Over the past 12 months, employment growth has averaged 169,000 per month. In line with Thursday’s Challenger jobs cut report, the BLS indicates that the retail sector took a particularly intense beating in March. Employers announced they would remove 49,255 jobs from their payrolls last month — a decrease of 11 percent from the 55,356 reported in February. However, March’s planned layoffs were 30 percent higher than the figure recorded from the same period a year ago, representing the fourth time in the last six months that monthly job cuts have been higher than the previous year.
The retail sector accounted for 16,445, or about 33 percent, of March’s layoffs…
The U.S. Department of Labor reported on Thursday morning that initial claims for unemployment insurance increased by 28,000 for the week ended March 30. Claims totaled a seasonally-adjusted 385,000, a 7.8 percent increase from last week’s unrevised figure of 357,000 and about 10 percent higher than expectations. This is the highest level of claims since late November.
Earlier in the week, ADP reported that total non-farm private sector payrolls increased by 158,000 in March. Ostensibly better than the government’s report, this figure still compares unfavorably against an upwardly-revised 237,000 additions in February and expectations for as much as 205,000 for March. ADP reported that an average of 191,000 new private sector payrolls were added per month in the first quarter.