Jobs Increase by 178,000 in March; MBA Economist Weighs In

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Total nonfarm payroll employment increased by 178,000 in March, the Bureau of Labor Statistics reported.

And, the unemployment rate edged slightly lower to 4.3%.

Job gains occurred in health care, in construction, and in transportation and warehousing. Federal government employment has continued to decline.

The change in total nonfarm payroll employment for January was revised up by 34,000, from 126,000 to 160,000. The change for February was revised down by 41,000, from a loss of 92,000 to 133,000.

“Employment increased by 178,000 in March. However, this topline number overstates the strength of this report. Much of the gain was a rebound in health care jobs following the resolution of a strike,” MBA SVP and Chief Economist Mike Fratantoni said. “The three-month average of 68,000 for the first quarter of the year is likely the best signal of a job market showing resilience amid a number of challenges.”

“Wage growth ticked down to 3.5% at an annual rate,” he stated. “This was despite the slight decrease in the unemployment rate to 4.3% in March from 4.4% in February.  The decline in the unemployment rate was driven by a slight drop in the labor force participation rate, as both the number of employed and the unemployed decreased in the month.  The decline in participation was reflected in an increase in the U-6 measure to 8% from 7.9% the month prior.”

“With inflation likely to pick up significantly due to the oil price shock, the FOMC is unlikely to cut rates unless the job market were to weaken precipitously,” Fratantoni continued. “This job report shows a more resilient job market instead.  As a result, we do not expect the FOMC to cut this year.”