March Payrolls Miss: Fewest Jobs Added Since September, But Wages Come In Hot

March Payrolls Miss: Fewest Jobs Added Since September, But Wages Come In Hot

In our NFP preview we said that only a catastrophic March jobs report coupled with even more negative data could shake the Fed’s determination to pursue a 50bps rate hike in May. Which is why despite a modest miss in the just reported March jobs data, we fail to see anything remotely ugly enough to change the big picture which sees the Fed continuing its liftoff as planned, with a 50bps hike next month.

Here’s what the BLS reported moments ago:

March Nonfarm Payrolls rose 431K and below the exp. 490K. This was also the lowest jobs increase since last September. However, the ~60K miss was more than offset by a 72K upward revision to February and a total 95K revision to the past two months:
The change in total nonfarm payroll employment for January was revised up by 23,000, from +481,000 to +504,000, and the change for February was revised up by 72,000, from +678,000 to +750,000. With these revisions, employment in January and February combined is 95,000 higher than previously reported.

March Unemployment Rate Falls to 3.6% from 3.8%, below the exp. of 3.7%
Underemployment Rate 6.9%, down from 7.2%
Labor Participation Rate 62.4%, in line with exp. 62.4%, and above the 62.3% last

March Average Hourly Earnings Rise 0.4% M/M; Est. 0.4%, and up from an upward revised 0.1% in Feb;
March Average Hourly Earnings rose 5.6% vs Year Ago, higher than the est 5.5%

Average Weekly Hours All Employees 34.6, down from 34.7, and below the exp. 34.7

While there was some weakness at the headline jobs level, the market will gloss over this and instead focus on yet another month of red hot wage growth: average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents to $31.73 in March. Over the past 12 months, average hourly earnings have increased by 5.6% In March, average hourly earnings of private sector production and nonsupervisory employees rose by 11 cents to $27.06. One reason for the stregnth, however, was purely statistical: the average workweek for all employees on private nonfarm payrolls fell by 0.1 hour to 34.6 hours in March.

The unemployment rate declined by 0.2 percentage point to 3.6 percent in March, and the number of unemployed persons decreased by 318,000 to 6.0 million. These measures are little different from their values in February 2020 (3.5 percent and 5.7 million, respectively), prior to the coronavirus pandemic. The chart below shows the breakdown in the unemployment rate by labor status flows.

Among the major worker groups, the unemployment rate for adult women (3.3 percent) declined in March. The jobless rates for adult men (3.4 percent), teenagers (10.0 percent), Whites (3.2 percent), Blacks (6.2 percent), Asians (2.8 percent), and Hispanics (4.2 percent) showed little change over the month, and unemployment fort his group is now below pre-covid levels.

The underemployment rate for young adults aged 16 to 24 in March is 12.9%, according to Bloomberg calculations of Bureau of Labor Statistics data. Total unemployed aged 16-24 at 1,713,000. Marginally attached workers aged 16-24 at 264,000.


Tyler Durden
Fri, 04/01/2022 – 08:40

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