Disappointing Payrolls Report for March, With Payrolls Revised Lower for February and January

April 7, 2017 by Jon C. Ogg

Friday’s key economic reporting was dominated by the employment situation from the Bureau of Labor Statistics (BLS). It was a mixed report in some aspects and weak in others. It is also a report that simultaneously may be blamed on weather and may question some of the new pro-growth expansion’s real effectiveness.

The BLS reported that the official unemployment rate fell to 4.5% in March, better than the 4.7% expected by Bloomberg and the 4.7% in February.

The actual number of unemployed persons fell by 326,000 to 7.2 million, and the number of persons unemployed less than five weeks declined by 232,000 to 2.3 million. Another view on the labor force participation rate remained flat at 63.0% in March, and the employment-population ratio was at 60.1%.

Total nonfarm payrolls rose by a mere 98,000 in March, short of the 175,000 consensus estimate from Bloomberg. Also weaker in the report was that January’s payrolls were revised lower to 216,000 from 238,000 and February’s payrolls were revised down to 219,000 from 235,000.

Private sector payrolls came in at 89,000 in March. Bloomberg’s consensus was 170,000 for March, and February’s initial view of 227,000 was revised down to 221,000.

The number of long-term unemployed, measuring workers who have been jobless for 27 weeks or more, was 1.7 million people and accounted for 23.3% of the unemployed.

Employment increased in professional and business services with a gain of 56,000. Mining saw a gain of 11,000 jobs, and health care added 14,000 jobs in March. Financial activities saw a gain of 9,000 jobs.

Construction, which had been helping to add to the count, added only 6,000 jobs in March. The retail trade sector lost 30,000 jobs.

The average workweek for all employees in the private sector was unchanged at 34.3 hours in March.

Average hourly earnings in the private sector rose five cents to $26.14 in March, after a seven-cent gain in February. That number seems small on the surface, but average hourly earnings have risen by 68 cents (a gain of 2.7%) from a year ago. The average hourly earnings of private-sector production and nonsupervisory employees rose four cents to $21.90.

Friday’s markets were jittery ahead of the report due to missile strikes in Syria, but the ADP trend had nudged expectations to look for a stronger number rather than a handily weaker one. This was one of those reports that gives the bulls and bears alike many talking points.

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