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Employment Situation: Weather Pulls Jobs Back To Trend

April 7, 2017

Bottom Line: Payroll Employment rose by 98k in March, compared with market expectations for an increase of 180k. While some of the smaller gain could be attributed to weather (construction jobs grew just 6k vs. 59k in Feb), there were sharply fewer jobs created in service producing sectors, which bears watching going forward. There were modest revisions to the previous two months which subtracted a total of 38k jobs. Job creation has averaged 178k over the past 3 months vs. the past 12 months average of 182k. The unemployment rate dropped, as household employment grew more than the increase in labor force. Over the past year, the unemployment rate has declined by 0.5 percentage points, the result of 1,699k more people finding jobs as 923k more people entered the labor force. Both hourly and weekly earnings rose modestly after a modest increase in February. The workweek was unchanged and the 3-month average is now 34.3.

Payroll Employment rose by 98k in March, compared with market expectations for an increase of 180k. The prior 2 months were revised, lower in February by 16k and lower in January by 22k.

Government jobs ROSE by 9k. Consequently, private sector jobs ROSE by 89k. Overall employment is now 1.5% ABOVE its year ago level, Over the past 12 months, 2,185k jobs have been created.

In March, the job gains were in Trade, Transportation & Utilities (-27k with -30k of those in Retail Trade), Professional & Business Services (+56k with the addition of 11k in Temp Help Services), Education & Health Services (+17k), Manufacturing (+11k), Financial Activities (+9k), Financial Activities (+9k), Financial Activities (+9k), and Construction (+6k).

Jobs were shed in Information (-3k).

The Unemployment Rate FELL by 0.2 percentage points in March to 4.5%, compared with market expectations for a no change to 4.7%.

Household employment rose by 472k while the labor force increased by 145k, resulting in a decrease in the number of unemployed of 326k.

The Labor Force Participation Rate was UNCHANGED at 63.0%. The Employment-Population Ratio ROSE by 0.1 percentage points to 60.1%.

The number of people Working Part-Time for Economic Reasons FELL by 135k to 5,502k. while Long-Term Unemployment FELL by 114k to 1,687k (accounting for 23.4% of the unemployed), while the Mean Duration of Unemployment ROSE by 0.2 weeks to 25.3 weeks.

There are now 7.2 million people officially unemployed. In addition, there are another 5,781k people who say they want a job but are not currently looking for one. Finally, another 5,502k people are working part-time because of slack economic conditions.

Hourly Earnings ROSE by 0.2% in March, below market expectations of 0.2%. Hourly earnings are now 1.7% ABOVE their year ago level.

Weekly Earnings also ROSE by 0.2%, the result of the change in hourly earnings and a steady workweek. Weekly earnings are now 2.4% ABOVE their year ago level.

The Average Workweek was UNCHANGED at 34.3 hours, BELOW the market consensus at 34.4 hours.

Article by Contingent Macro Advisors