US non-farm payrolls rise by 196,000 in March, earnings fall short
By Alexander Bueso
Date: Friday 05 Apr 2019
(Sharecast News) - US job growth returned to trend last month as some of the erratic factors that depressed the previous month's reading washed out of the data, but the latest wage data fell short of forecasts.
According to the Department of Labor, non-farm payrolls grew by 196,000 during the month of March following an initially reported increase of 20,000 in February, alongside a combined upwards revision for the previous two months of 14,000.
Prior to Friday's report, the rolling three-month average for job gains had stood at 186,000 and that for the back half of 2018 at 211,000.
The consensus forecast for March had been for a reading of 175,000.
Average hourly earnings fell short of forecasts, increasing by 0.1% month-on-month (consensus: 0.3%), pushing the year-on-year rate of increase down from 3.4% to 3.2% (consensus: 3.3%).
The labour force participation rate also eased, slipping by two tenths of a percentage point to 63.0% as the civilian labour force and employment shrank by 224,000 and 201,000, respectively.
Nonetheless, as Mickey Levy at Berenberg Capital Markets pointed out, when adjusted for inflation the rate of increase in earnings was likely above 1.0%, which he said was "good news for consumption".
And the participation rate for prime working-age Americans remained near its recent high, the same economist said.
Unemployment meanwhile printed at 3.8% for March, as expected by the consensus and was unchanged versus the month before. For the first quarter as a whole the rate of joblessness ticked higher from 3.8% over the previous three-month stretch to 3.9%.
"But this was due to the partial government shutdown. We expect the unemployment rate to resume its decline going forward, albeit at a slower pace than recent years," said Levy.
Americans did nevertheless work slightly longer hours last month, with the length of the average work week rising from 34.4 hours to 34.5.
"Overall, these data won't change anyone's mind about whether the Fed ultimately will have to hike this year. The payroll gain is welcome but one month does not prove that the trend remains close to 200K, and doves will point to the modest AHE gain as evidence that the Fed's "patient" stance is justified," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"We still think that the summer and fall will bring clearer signs that the labor market is too tight and won't loosen without further tightening, but that's not the story now."
"Although payrolls appear to have decelerated a little this year, they remain at a solid pace that should continue to support US household income and demand," chipped in Barclays Research's Jonathan Millar.
"[...] Combined with other available indicators for March, today's data paint a picture of resilient US demand that has stepped down to a more moderate pace of growth following last year's robust gains."
-- More to follow --
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