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Jobs and wages grow slowly in March


Unemployment(2)

The U.S. unemployment rate dropped to 4.5 percent in March, although the number of jobs added was less than half of February’s total, the U.S. Department of Labor reported.

On the heels of 235,000 job additions in February, the 98,000 added in March seemed to be a disappointment to some. Barclays economist Rob Martin, for instance, said there were “no silver linings in the details” of the report, The New York Times reported. Some economists had predicted a jump of 180,000.

Other officials, however, weren’t as troubled and indicated March was probably a temporary dip.

“The soft hiring seen in March is not too concerning and likely a single month aberration,” said Lawrence Yun, chief economist for the National Association of Realtors. “The recent high levels of voluntary quitting, presumably because of better job opportunities elsewhere, will lead to strengthening wage growth.”

March’s unemployment rate dropped 0.2 percentage points from the previous month. The total number of unemployed Americans declined by 360,000, to 7.2 million, the labor report stated.

Wages also continue to rise, with average hourly earnings jumping 5 cents, to $26.14, in March. Compared to last March, workers make an average of 68 cents an hour more.

The construction industry leveled off sharply, with 6,000 new jobs in March, about one-tenth of February’s total of 59,000. The labor report stated that the industry has been trending up since late last summer, specifically among specialty contractors and residential builders.

“Housing demand still looks solid going forward,” Yun said. “Housing supply, on the other hand, could be constrained further because homebuilders still face worker shortages, despite construction employment gains holding steady in recent months.”

Retail jobs declined by 30,000 in March, continuing a recent trend as several major chains have closed locations or filed for bankruptcy protection. Since last October, the retail industry has shrunk by 89,000 jobs.

A report from online real estate investment-management company HomeUnion noted a pending boost from Amazon, the nation’s largest online retailer. Amazon has announced plans to add 100,000 jobs during 2017 and the first half of 2018, which equates to about 2.5 percent of the nation’s projected job growth during that period, HomeUnion stated. The report went on to note that most of Amazon’s new jobs would be in suburban warehouses, supporting housing demand on the edges of major cities.

The unemployment rate of 4.5 percent is the lowest the U.S. has seen since May 2007. But Lindsey Piegza, chief economist at Stifel Fixed Income, called the labor report a “mixed bag” of results.

“Wage growth, one of the key factors of labor-market strength from the [Federal Reserve’s] perspective, slipped marginally to 2.7 percent, suggesting waning support to earnings as we head into the second quarter of the year,” Piegza said.

Neil Pierson is editor of the Scotsman Guide Commercial Edition. He can be reached at neilp@scotsmanguide.com.

     


 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

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