Despite three reports this week showing a cooling labor market, the nonfarm payroll was exactly as economists had projected according to the latest data from the Bureau of Labor Statistics.
- Total nonfarm payroll employment rose by 236,000 in March, down from 326k in February and the lowest monthly number since the historic dip in April 2020.
- The unemployment rate fell slightly to 3.5%, down from 3.6% but higher than January’s 3.4%.
Hit The Nail On The Head. Economists may have missed every other labor market report this week but they hit the nail on the head with the prediction that the economy would create 239k jobs in March.
Leisure & Hospitality. Leisure and hospitality added 72,000 jobs in March which was lower than the average monthly gain of 95,000 these past six months.
- Government employment jumped by 47,000 jobs followed by professional & business services (+39k), health care (+34k), and social assistance (+17k).
Wages. Average hourly earnings for all employees on private nonfarm payrolls increased to $33.18, up 9 cents (0.3%) from February and up 4.2% year-over-year which still puts real wages down with the current inflation rate around 6.0%.
Correction. Mixed revisions for the last two months as employment for January was revised down by 32,000 but February was revised up by 15,000.
BOTTOM LINE: Markets were clearly thinking the nonfarm number was going to miss based on JOLTS, ADP, and jobless claims. Rates should move slightly higher as bonds are selling off after the news which has pushed the 10-year yield up 8 basis points on this truncated trading day. Now all eyes shift to Wednesday’s CPI report.