March Payrolls Come in Handily Under Expectations

Jon C. Ogg

Friday’s economic reporting cycle was dominated by the employment situation report from the Bureau of Labor Statistics (BLS). Expectations were for a cooler payrolls report than the huge gains seen in February, but there was also an expectation that wage pressure was continuing to rise. And some revisions to the prior February report may smooth some of the weaker-than-expected gains in March.

While the stock market is very weak on Friday morning, the reality is that the futures on major equity indexes had been down 1% ahead of the report due to more trade tariff expansion from President Trump against China.

Nonfarm payrolls rose by just 103,000 in March, well under expectations. Dow Jones was calling for nonfarm payrolls to rise by 178,000 and Bloomberg had an estimate of 175,000.

Private sector payrolls rose by 102,000 and the government payrolls rose by 1,000. Bloomberg was calling for 175,000 private sector payrolls.

The unemployment rate also came in flat at 4.1%. Bloomberg and Dow Jones both saw it at 4.0%.

Average hourly earnings were up 0.3%, compared with expectations of 0.3% at Bloomberg and 0.2% at Dow Jones. Average hourly earnings rose by 2.7% from a year ago to $26.82 per hour.

The average workweek was flat at 34.5 hours and the labor force participation rate ticked down to 62.9% from 63.0%.

Earlier this week, ADP reported that March’s payrolls from its own client forecasts were up 241,000 in March. The report was far stronger than the 185,000 expected by Bloomberg and higher than the range of 110,000 to 225,000. ADP noted on CNBC that the pooling is a different source and that the labor market was about to run into serious shortfalls. That said, ADP noted how the sourcing changes could still let the official government number for nonfarm payrolls be under 200,000 — and that’s where economist expectations were for March.

Also, some revisions were made to prior reports. The preliminary numbers prior to revisions for February were 313,000 in nonfarm payrolls and 287,000 in private sector payrolls. Those figures were revised to 326,000 and 320,000, respectively.

Among the major worker groups, the BLS showed that the unemployment rates for each demographic as follows:

  • Adult men (3.7 percent),
  • Adult women (3.7 percent),
  • Teenagers (13.5 percent),
  • Whites (3.6 percent),
  • Blacks (6.9 percent),
  • Asians (3.1 percent),
  • and Hispanics (5.1 percent).