Jobs Report: 215,000 Jobs Added In March, Unemployment Rate Higher At 5%

New data out Friday from the Bureau of Labor Statistics shows employers in the United States adding 215,000 jobs last month. The BLS report also shows the unemployment rate at 5%, up from 4.9% in both January and February. Economists had been anticipating 203,000 jobs would be added in March and for the unemployment rate to remain steady.

Unemployment Rate & Jobs Added/Lost in the US | CareerTrends

Payroll counts from January and February were little changed. The gain for February, first recorded at a surprisingly strong 242,000, was revised higher to plus 245,000. Meanwhile the January count was revised to plus 168,000 jobs down from the most recent reading of 172,000. Net total job gains in January and February were therefore 1,000 lower than what BLS previously reported. Monthly job gains over the past three months have averaged 209,000.

Though at first blush, the bump in the unemployment rate may appear negative, the increase is due to more people entering the looking for work. In other words, the rate increased for what most economists consider the “right reasons.” The labor force gew from 158,890,000 in February to 159,286,000 in March. With job openings at a high, according to Andrew Chamberlain chief economist at job site Glassdoor, workers are coming in from the margins. “In my view we are still at full employment,” said Chamberlain in an interview Friday.

The labor force participation rate was 63%, up from 62.9% in February and 62.7% in Janauary. Since September the measure has increased by 0.6%, as has the employment-population ratio, which now stands at 59.9%. Thee U-6 rate, which measures under-employment, came in at 9.8% in March, up from 9.7% February and from 11% a year ago.

US Unemployment Rate vs Labor Force Participation Rate | CareerTrends

While the data suggests many of the workers entering the workforce found employment, it is clear some did not. At the end of March 8 million Americans were unemployed, up from 7.8 million in February. This, says Quincy Krosby, Prudential Financial market strategist, is holding down pressure on wages.

Average hourly earnings increased by 7 cents in March to $25.43. The bump comes after a 2 cent decline in February. In the past year, average hourly earnings have gained 2.3%. Having more people to chose from, Krosby explained, makes it so employers don’t have to pay much more. “It is a strong labor market,” she says. “Is it overheating? Certainly not.”

Stocks opened in the red Friday, continuing a trend lower seen in pre-release, pre-market trading due to weak days for foreign markets and questions about the price of oil. The report is unlikely to change the course of Federal Reserve policy. Friday morning, futures markets placed the probability of and April rate hike a 6% and a June hike at 31%,

Jobs Report: U.S. Economy Added Just 74K Jobs In December, Unemployment Down To 6.7%

By Samantha Sharf, Forbes Staff

The stretch of positive economic news that led to the Federal Reserve’s decision to begin trimming asset purchases last month has not continued into the new year.

Employers added just 74,000 jobs in December, well below the 197,000 economists expected. The unemployment rate, which is drawn from a different survey of households, was down to 6.7% from 7% in November. The labor force participation rate was down from 63% to 62.8%, the lowest rate in more than three and a half decades. The the employment-population ration was steady at 58.6%.

Following the news the S&P 500 ping ponged from down about 1 point to up  as much 4.5, circling 1,835. The Dow was similarly sporadic down as much as 17 points and up as much as 22.

“This has been a two steps forward and one step back recovery,” said Mark Hamrick, Washington bureau chief at Bankrate.com, in a phone interview. While the lowest since October 2008 unemployment rate looks strong that survey only counts people who are looking for work as unemployed, suggesting many people left the labor market last month. The number of unemployed declined by 490,000 to 10.4 million.

In a note following the Bureau of Labor Statistics release, Capital Economics Chief U.S. Economist Paul Ashworth wrote that he suspects the weakness was due in part to unseasonably harsh weather in December. He notes that the household survey shows that 273,000 people reported not being able to work due to the weather, compared to 166,000 average in past years. In November just 37,000 people reported not being able to work due to weather conditions.

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“That doesn’t mean we can mechanically translate that into a 110,000 hit to payrolls, however, because the payroll survey still counts workers as employed as long as they were paid for one day in the sample period, regardless of whether they physically turned up,” he wrote. “Nevertheless, it is normally a pretty good indication. The 16,000 decline in construction payrolls and the dip in average weekly hours worked are also indications that bad weather played a role.”

Hamrick agreed that since we know housing starts are on the rise, the decline in construction jobs grants validity to the notion the weather figured heavily into the December results. Construction jobs were added in November.

Jobs were also lost in health care and information.

Kathy Bostjancic, director of macroeconomic analysis at The Conference Board, also similarly feels the weakness may be momentary. “The Conference Board’s Leading Economic Indicators and the results from the latest survey of purchasing managers are two economic readings that suggest employment gains will rebound in the New Year.”

In a phone conversation, PNC Chief Economist Stuart Hoffman urged people to take the new data in stride, noting that if you average the October, November and December numbers you get 172,000 jobs added a month, not far from the 182,000 per month average for the year. “Maybe it does mean you curb your enthusiasm a little bit about the economy being ready to break out on the upside, but I don’t think there is any last weakness.” He also expects upward revisions to December and 2013.

The debate is likely to turn next to what how the Federal Reserve will respond the the news. Ashworth expects the Fed to cut another $10 billion from its asset purchases, tapering from $75 billion to $65 billion. “At 6.7%, the unemployment rate is closing in on the 6.5% threshold that was originally intended to signal that the Fed would at least begin to consider raising the fed funds rate.” However Bernanke was adamant that 6.5% was not a trigger and would be considered alongside other data points. Hamrick does not expect the Fed to make big moves until the unemployment rate “dips below 6.5% for the right reasons not just because of the decline in labor force participation.”

Hoffman suspects “it would take several more months of either very weak payroll job numbers, or even bigger drops in the unemployment rate for the right reasons such as huge increases in jobs before the Fed would want to deviate from its $10 billion taper a meeting path of least resistance.”

The jobs that were added came largely from retail and wholesale trade which gained 55,000 and 15,000 jobs respectively. In retail, food stores and clothing stores added 12,000 each, general merchandisers added 8,000 and car dealers added 7,000. The holiday season hiring beat the retail 2013 average by 23,000.Business services, manufacturing and mining also added jobs.

Employment numbers were revised up for November from plus 203,000 to plus 241,000. With no changes to the 200,000 number for October, total employment gains those months were therefore 38,000 higher than previously reported. In the last 12 months job growth has averaged 195,000 per month. In 2013 an average of 182,000 jobs were added each month, just slightly below 2012′s 183,000 average monthly gains.