After several months of instability, job creation appears to have rebounded in March, with nonfarm payrolls growing by 196,000 and the overall federal unemployment rate maintaining at 3.8 percent, says the United States Bureau of Labor Statistics. In fact, the jobs report was much better than the 175,000 jobs that the Dow Jones had estimated on the heels of one of the worst Februarys we’ve seen in recent years: one in which economists were left to contemplate whether or our ten year expansion was finally slowing down.
CUNA Mutual Group chief economist Steve Rick comments, “With a strong March employment report now in the books, we’ve gotten some reassurance that the labor market is still strong. Of course, last month’s nosedive was disappointing, especially after December and January had such impressive numbers despite some sizable headwinds. But a good March report shows that February was more of an outlier than a canary in the coal mine.”
Still, looking at the numbers, wage gains slid, a little, from its strong pace by growing only 0.14 percent for the month. This contributes to 3.2 percent year over year, which is below the 3.4 percent analysts had expected compared with the rate from last month. In addition, it appears the average work week increased by 0.1 hours, to 34.5 hours per week.
What may be more important than job growth, perhaps, economic conditions appear to be more favorable than they were only a few months ago. The Atlanta Fed says the GDP for the first quarter is expected to rise more than 2 percent, even though it had only been tracking gains at 0.2 percent a few weeks ago. That makes sense, though, when you consider that 4Q GDP grew 2.2 percent, improving 2018 growth to nearly 3 percent.
TIAA Bank president of world markets Chris Gaffney notes, “The 196,000 jobs added in March shows the US economy is not stalling out, something investors were worried about following February’s disappointing numbers. And other data in the report showed wages are rising but not at a rate which would spur inflation. This was a perfect report for equity investors as it shows the US economy is still marching along while the wage numbers will keep the FOMC on the sidelines.”