US unemployment Rate Despite Strong Job Numbers
The US economy added 215,000 jobs in March while the unemployment rate slightly ticked up to 5 percent. The labor force participation rate also increased to 63 percent, which accounted for the uptick in the unemployment rate. Overall, the March employment report indicated that the US economy continued to keep its recovery on track. Some had expected weaker numbers. Dave Lutz of Jones Trading said in an email this morning:
JOBS FRIDAY– Street at 205k, but a big skew – Many top forecasters are over 200k tho, while many feel seasonality and adjustments could cause a big miss – From 2008, the March payroll # has missed by an average of 53,000 – the worst of any month. Wages likely increased last month, with average hourly earnings forecast rising 0.2 percent after slipping 0.1 percent in February – Economists say an economic growth rate of between 3.0 and 3.5 percent in wages is needed to lift inflation to the Federal Reserve’s 2.0 percent target. and March is the cruelest month for U.S. nonfarm payrolls as the published data came below estimates in seven of past eight years – From 2008, actual release numbers fell short of the median in Bloomberg survey forecasts by an average of approximately 53,000.
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CIBC analysts opine:
We’ve argued previously that wages could still be being depressed by the available pool of potential workers currently outside of the labour market. That could still be the case for a few months yet, but we saw further evidence in March that workers are finally coming back into the labour force. The participation rate ticked up to 63.0% in March, and was the primary reason for a slight move higher in the jobless rate to 5.0%. Labour force participation has moved up steadily since troughing last September, with the latest reading the highest since March 2014.
• The only real disappointment in today’s figures was average working hours, which remained at 34.4 rather than ticking up as expected. That meant aggregate hours rose by a fairly modest 0.2%, although were still up by 1.8% annualized in the quarter. That’s well above tracking forecasts for Q1 GDP, suggesting that we will either see an upward revision or a healthy rebound in the economy during the second quarter.
See the following visualizations which highlight relevant figures from the March employment report from the Bureau of Labor Statistics.
US unemployment rate
US unemployment & Jobs Added/Lost in the US
Jobs Added/Lost in the United States
National Unemployment Rate
US Unemployment Rate vs Labor Force Participation Rate