Job Market Continued to Improve in March

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The U.S. economy added about 196,000 jobs in March, above analysts’ expectations of around 180,000, according to estimates from the Bureau of Labor Statistics.

However, average hourly earnings increased only 0.1% month-per-month and 3.2% year-over year, below analysts forecasts of 0.3% and 3.4%.

The unemployment rate was flat compared with February at 3.8%.

The number of unemployed persons was essentially unchanged at 6.2 million.

The labor force participation rate was also flat at 63%.

Notable job gains occurred in health care and in professional and technical services. Health care added 49,000 jobs in March and 398,000 over the past 12 months.

Employment increased in ambulatory health care services (+27,000), hospitals (+14,000), and nursing and residential care facilities (+9,000), according to the report.

Employment in professional and technical services grew by 34,000 month-over-month and 311,000 year-over-year.

Computer systems design and related services added 12,000 jobs. Employment continued to trend up in architectural and engineering services (+6,000) and in management and technical consulting services (+6,000).

Employment figures in most other major industry segments were little changed.

Average hourly earnings for all employees on private nonfarm payrolls increased four cents to $27.70 per hour. This follows an increase of 10 cents in February.

Average hourly earnings of private-sector production and nonsupervisory employees increased by six cents to $23.24.

“The March jobs report suggests that the labor market remains solid overall,” says Doug Duncan, chief economist for Fannie Mae, in a statement. “Job gains rebounded strongly from a lackluster performance in February, increasing by 196,000, suggesting that February’s small increase was an aberration.

“Job growth was revised up in February, from 20,000 to 33,000,” Duncan adds. “Thus, the three-month moving average edged down to 180,000 in March from 191,000 in February, suggesting employment growth may have moderated only slightly.”

Duncan notes that the unemployment rate at 3.8% is the lowest its been since 1969.

“[The] report suggests that the labor market remains healthy, which should ease recession concerns and curb expectations of a Fed rate cut for the moment,” Duncan says. “We expect the Fed to remain patient given a solid labor market and little evidence of upside inflation risks.

“Meanwhile, employment in the residential construction sector expanded following a decline in February,” he adds. “This should allow builders to continue expanding supply at a gradual pace though labor shortages across the industry remain a concern.”

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