US Sees Strong Wage and Job Gains in March with Unemployment Lower

The market had expected the March report released Friday to show nonfarm payrolls rise 200k new jobs which it beat with 303k new jobs.  This follows a revised increase of 270,000 in February (from 275,000). Nonfarm private payrolls rose by 232,000 in March (consensus 160,000) following a revised increase of 207,000 in February (from 223,000). Job growth in March was led by faster hiring in health care, and construction. Leisure and hospitality jobs have now bounced back above its pre-pandemic level. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling in some segments and states. The unemployment rate dipped to 3.8% (consensus 3.8%) from 3.9% in February.

Treasury yields moved higher in response to the data. The 10-yr note yield moved from 4.32% to 4.39% after the data. The 2-yr note yield moved from 4.66% to 4.71%.

Working

Average hourly earnings were up 0.3% (consensus 0.3%) following a revised 0.2% increase in February (from 0.1%). The average workweek rose to 34.4 hours in March (consensus 34.3) from 34.3 hours in February. The report continued to support a solid earnings growth outlook at the same time however doesn’t support the outlook for the Fed to cut rates soon.

March 2024 U.S. Employment Report

US Jobs Report

Employment

  • Change In Nonfarm Payrolls Mar: 303K (est 214K; prev 275K)
  • Unemployment Rate Mar: 3.8% (est 3.8%; prev 3.9%)
  • Two-month net revision +22K vs -167K prior
  • U6 Underemployment Rate Mar: 7.3% (prev 7.3%)
  • Participation rate 62.7% vs 62.5% prior
  • Change in private payrolls 232K vs +160K expected
  • Change in manufacturing payrolls 0K vs +5K expected
  • Household survey +498K vs +63K prior

Earnings

  • Average Hourly Earnings (M/M) Mar: 0.3% (est 0.3%; prev 0.1%)
  • Average Hourly Earnings (Y/Y) Mar: 4.1% (est 4.1%; prev 4.3%)
  • Average Weekly Hours All Employees Mar: 34.4 (est 34.3; prev 34.3)

Where the Jobs Were:

  • Health care (72K), namely ambulatory health care services (28K) and hospitals (27K);
  • Government (71K), namely local government (49K); and construction (39K).
  • Leisure and hospitality (49K), returning to its pre-pandemic level.
  • Employment showed little or no change in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services

    The US economy added 303K jobs in March 2024, the most in ten months, compared to a downwardly revised 270K in February and forecasts of 200K. January data was also revised up, so employment in January and February combined is 22K higher than previously reported. Employment gains remain elevated by historical standards and continue to surpass the 70K to 100K needed monthly to keep up with the expanding working-age population.

    United States Non Farm Payrolls

    Private Jobs

    The US private sector added just 211 thousand in December of 2021, the smallest gain since January and well below forecasts of 365 thousand.

    United States Nonfarm Payrolls - Private

    Government Jobs

    Government Payrolls in the United States fell by fell by 12 thousand in December of 2021, the smallest drop since September.

     

    United States Government Payrolls

    Manufacturing Jobs

    Manufacturing Payrolls in the United States were unchanged in March 2024, missing market forecasts of a 5k rise, following a downwardly revised 10k decrease in the prior month. Manufacturing Payrolls in the United States averaged 3.8k from 1939 until 2024, reaching an all-time high of 655k in April of 1946 and a record low of -1715k in September of 1945

    United States Manufacturing Payrolls

     

     Wages

    • In March, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents, or 0.3 percent, to $34.69.
    • Over the past 12 months, average hourly earnings have increased by 4.1 percent.
    • In March, average hourly earnings of private-sector production and nonsupervisory employees edged up by 7 cents, or 0.2 percent, to $29.79.
    United States Average Hourly Earnings MoM

    Avg. Hourly Earnings

      United States Average Hourly Earnings YoY

       Hours

      • In March, the average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.4 hours.
      • In manufacturing, the average workweek was unchanged at 40.0 hours, and overtime edged down by 0.1 hour to 2.9 hours in March.
      • The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.9 hours.
      United States Average Weekly Hours

       Household Survey Data

      Both the unemployment rate, at 3.8 percent, and the number of unemployed people, at 6.4 million,
      changed little in March. The unemployment rate has been in a narrow range of 3.7 percent to 3.9 percent since August 2023.

      Among the major worker groups, the unemployment rate for Blacks (6.4 percent) increased in March,
      while the rates for Asians (2.5 percent) and Hispanics (4.5 percent) decreased. The jobless rates for adult
      men (3.3 percent), adult women (3.6 percent), teenagers (12.6 percent), and Whites (3.4 percent)
      showed little or no change over the month.

      The number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, was little changed in March. The long-term unemployed accounted for 19.5 percent of all unemployed people. Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at
      60.3 percent were little changed in March. These measures showed little change over the year.

      The number of people employed part time for economic reasons, at 4.3 million, changed little in
      March. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

      In March, the number of people not in the labor force who currently want a job, at 5.4 million, was little changed. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

      Among those not in the labor force who wanted a job, the number of people marginally attached to the
      labor force, at 1.6 million, was little changed in March. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was little changed at 337,000 in March.


      Establishment Survey Data


      Total nonfarm payroll employment rose by 303,000 in March, higher than the average monthly gain of
      231,000 over the prior 12 months. In March, job gains occurred in health care, government, and construction.

      • Health care added 72,000 jobs in March, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
      • In March, employment in government increased by 71,000, higher than the average monthly gain of 54,000 over the prior 12 months. Over the month, employment increased in local government (+49,000) and federal government (+9,000).
      • Construction added 39,000 jobs in March, about double the average monthly gain of 19,000 over the prior 12 months. Over the month, employment increased in nonresidential specialty trade contractors (+16,000).
      • Employment in leisure and hospitality trended up in March (+49,000) and has returned to its pre pandemic February 2020 level. Over the prior 12 months, job growth in the industry had averaged 37,000 per month
      • Employment in the other services industry continued its upward trend in March (+16,000). The industry had added an average of 8,000 jobs per month over the prior 12 months. Employment in other services remains below its February 2020 level by 40,000, or 0.7 percent.
      • Employment in social assistance continued to trend up in March (+9,000), below the average monthly gain of 22,000 over the prior 12 months.
      • In March, employment was little changed in retail trade (+18,000). A job gain in general merchandise retailers (+20,000) was partially offset by job losses in building material and garden equipment and supplies dealers (-10,000) and in automotive parts, accessories, and tire retailers (-3,000).
      • Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services.

      The change in total nonfarm payroll employment for January was revised up by 27,000, from +229,000 to +256,000, and the change for February was revised down by 5,000, from +275,000 to +270,000. With these revisions, employment in January and February combined is 22,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

      The Employment Situation for April is scheduled to be released on Friday, May 3, 2024, at 8:30 a.m. (ET).


      ADP Report March 2024

      Private businesses in the US hired 184K workers in March 2024, following an upwardly revised 155K in February, and beating forecasts of 148K.

      “Inflation has been cooling, but our data shows pay is heating up in both goods and services”, Nela Richardson, chief economist,

      • It is the biggest increase in hiring in eight months, with employment rising in services (142K), namely leisure/hospitality (63K), trade/transportation/utilities (29K), education/health (17K), financial activities (17K) and information (8K) while professional/business activities shed 8K jobs.
      • The goods-producing sector added 42K jobs, mostly construction (33K) and natural resources/mining (8K) while manufacturing added 1K only.
      • Pay gains for job-stayers were unchanged at 5.1% after months of steady deceleration.
      • Pay gains for job-changers rose to 10%, the second straight increase, and the largest advance since July, with the biggest rises seen in construction, financial services and manufacturing.
      United States ADP Employment Change

      Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

      From The TraderCommunity Research Desk