Economists React: ‘So, The Post-Weather Rebound We Hoped For Did Not Happen’
U.S. nonfarm employers added 192,000 jobs in March, and the unemployment rate remained unchanged at 6.7%, the Labor Department announced Friday. There was good news deeper in the report: January’s 129,000 gain was revised up to 144,000 and February’s 175,000 gain was revised up to 197,000.
Job growth gained momentum in February and March as the weather improved. Firms and consumers are making investments they deferred in January. This bounce in economic activity is driving companies to hire at a faster rate. The coldest start to the year since 1994 reduced business and consumer activity, discouraging firms from hiring workers. Still, the February and March payroll numbers are promising and suggest that the economy is shaking off the effects of the inclement weather. –Joseph Lake, Economist Intelligence Unit
So the post-winter rebound we hoped for did not happen, but the winter hit was smaller than previously believed. … Overall, then, a solid return to form. –Ian Shepherdson, Pantheon Macroeconomics
The rebound in hours worked suggest a significant gain in industrial production while the flat reading on hourly earning will hold down wage and salary income which is a key missing ingredient to sustainable consumer spending. –Steven Ricchiuto, Mizuho Securities USA...MORE
In the only real negative aspect of this report, average hourly earnings for all employees were unchanged on a m/m basis in March (the median forecast was +0.2%) after +0.4% in February, +0.2% in January, +0.1% in December, +0.2% in November, and +0.1% in October. The y/y rise was 2.1% in March after a 2.2% increase in February. On a m/m basis, this measure can be driven by changes in the mix of employment. While many got excited by the February gain, it is our view that the underlying trend of this often volatile monthly measure remains broadly stable. As the labor market continues to pick up momentum, we would expect wage gains to accelerate modestly. We are just not there yet. –Joshua Shapiro, MFR Inc.
While the headline unemployment rate stood still at 6.7%, of added encouragement is the fact that the household side of the report reflected an employment gain of 476,000 while at the same time the number of unemployed rose by just 27,000. As a result the labor force participation rate edged ahead by 0.2% to 63.2%. –Andrew Wilkinson, Interactive Brokers
