U.S. Jobs: Bouncing Back in March After a Dismal February

Thankfully, the latest set of numbers from the U.S. Bureau of Labor Statistics for the March Employment Situation Summary, published this morning, have returned to normal. With the economists' prior consensus that the number would fall in a range from 150,000 to 200,000 jobs added, at 196,000 the report from the BLS comes in near the top of that range.

Even last month's dismal numbers were revised slightly upward, from 20,000 to 33,000. Even January's robust 311,000 got a slight boost to 312,000. This puts the trailing quarter average at a respectable, but not stellar, 180,000 jobs for each of the last three months (the monthly average for 2018 was 223,000 jobs).

Dips like February's do occur occasionally, but they're a lot easier to stomach when they come as one-offs, and not in a series. Also: unemployment is unchanged, at a near-historic low of 3.8 percent.

Where Did March Jobs Grow?

Most new jobs in March came from evergreen sectors. Healthcare, for example, added 49,000 jobs. With 398,000 jobs over the trailing 12-month period, that's almost 16,000 (32 percent) jobs above that trailing monthly average. Likewise, professional and technical services turned in a healthy 34,000 jobs. With 311,000 jobs over the same trailing year, that's 8,000 (31 percent) above that trailing monthly average, too.

Food services rebounded, adding 27,000 jobs for March, in line with the trailing annual monthly average. Construction added 16,000 jobs for March, about 4,000 behind the annual trailing monthly average. Manufacturing actually dipped slightly in March, down by -6,000 jobs, mostly because of a turndown in motor vehicles and parts (where the entirety of that dip may be found).

Other sectors — namely mining, wholesale trade, retail trade, transportation and warehousing, information, financial services, and government — remained flat, showing little or no change as compared to previous months.

A closer look at Information in Table A-14 shows 108,000 unemployed for a rate of 4.1 percent for March 2018, versus 105,000 unemployed for a rate of 4.0 percent in March 2019. This is a slight and encouraging improvement in the stats that the U.S. BLS gathers about this sector. It also puts the 2018 sector size at 2.63 million, and 2.62 million for 2019.

This would indicate a loss of 90,000 jobs in the sector over the last year. I don't think I agree with this assessment, however, and it's not borne out in CompTIA analyses, either. As recently as last month, the company's employment tracker sussed out 7,500 information jobs added that month. I expect something similar from them this month when they publish their findings for March 2019 later today.

Wages also continue to grow. Average hourly earnings for March are up by $0.04 to $27.70. This is somewhat of a comedown from last month's surprising $0.10 hourly gain. But things continue trending in the right direction. With unemployment low, reports that some employers are having difficulty filling open positions are starting to emerge.

There is still enough slack, however, in the labor force (and enough people converting from part-time to full-time work) that upward pressure on wages remains relatively weak. With economists also predicting lower economic growth for 2019 (2 to 2.5 percent versus 2.9 percent for 2018, says The Washington Post) it could be that wages will remain relatively flat, and job growth somewhat slower to match.

What's It All Mean?

Even so, it's no exaggeration to declaim that last month's numbers spooked the financial markets. This morning, all the major indices are up, but not dramatically (in a range of 0.37 for the S&P500 to 0.5% for the Dow as I write this post). I think that consensus forecasts already priced this return to normalcy into the markets earlier this week.

It will be interesting to watch over the next 2-3 months to see if monthly numbers continue at or under 200,000 monthly jobs added, or if an additional bounce will pull the average higher. Hopefully, we might see a return or even an improvement on last year's monthly average of 223,000 jobs.

Alas, most economists seem convinced a slight dip is where we're at and where we'll stay. As always, though, only time will tell.