March Nonfarm Payrolls Mixed As Hiring Slows

In a rather surprise payrolls data, latest figures from the US Bureau of labor statistics showed that the pace of employer hiring slowed down sharply in the month of March amid mixed signals which also saw the unemployment rate falling the lowest level in a decade.

The nonfarm payrolls rose 98,000 on a seasonally adjusted basis in March from the previous month. January and February payrolls were revised down to show a net decline of 38k. Economists polled were forecasting a headline payrolls print of 175k.

The US unemployment rate

The US unemployment rate dropped to 4.5%, from 4.7% in February. The unemployment rate in March was the lowest since May 2007.

The average hourly earnings rose 2.7% in March on a year over year basis. The gains in wages were seen to be steadily accelerating in recent month but remain shy of December’s print of 2.9%, which was the strongest since June 2009.

U.S. wage growth YoY (Source: FRED)

The latest US labor market data suggested that conditions might be tightening despite evidence of some underlying slack. The labor markets have been the brightest spots in the US economic recovery. However, despite nearly six years into the recession, the share of Americans opting out of the workforce remains below the pre-recession lows.

The labor force participation rate

The labor force participation rate was seen at 63% in March and has been trending lower in the past decade.

Another measure of unemployment which includes those who stopped looking for work and part-time workers looking for full-time jobs fell to 8.9% in March, which was down from 9.2% in February. The underemployment rate was the lowest since December 2007.