This morning’s report from the U.S. Labor Department came in just ahead of what economists forecast. On a seasonally adjusted basis, private sector employers added 195,000 new non-farm jobs, with local governments accounting for the balance.
Even with January’s slow start, the U.S. is averaging 209,000 new jobs each month.
Unemployment ticked up slightly in March to 5.0 percent, a consequence of nearly 400,000 more workers joining the labor force last month. Since September, when the so-called labor force participation rate hit a 39-year low of 62.4 percent, just over 2.4 million Americans have joined the labor force. The participation rate stood at 63 percent last month.
While that pushed up the unemployment rate, as the new participants begin to search for work, it’s good news of a sort for recruiters who have been struggling to fill jobs. It’s not yet possible to tell with certainty what effect the growing labor force is having, but SHRM’s LINE report says recruiting difficulty eased last month.
Noting that fewer manufacturing and service sector HR professionals reported recruiting difficulty in March, SHRM’s report said it was the “first time since February 2014 that recruiting difficulty declined in both sectors in the same month.”
However, wages rose by an average of 7 cents an hour to $25.43 in March, climbing from a low of about 2 percent annually just a year ago to 2.3 percent. Economists were predicting that as unemployment dropped, employers would have to raise pay in order to attract workers. Despite the increased supply of labor, wages now appear to be heading up.
Commenting to The New York Times before this morning’s jobs report, Michael Gapen, chief United States economist at Barclays said, “Wages and participation are where the rubber meets the road … We will take our cue about the overall strength of the economy based on that.”
The Labor Department report showed continued weakness in the goods-producing sector, with manufacturing losing 29,000 jobs and mining cutting 12,000, mostly due to slowdowns in the oil and gas industry.
On the plus side, construction jobs increased by 37,000. Retail, healthcare, leisure, and hospitality all had increases of five digits.