March payroll employment in the United States rose only 88,000 in the month and compared to expectations of a 190,000-unit increase though with greater pessimism entering into the market in recent days following weaker-than-expected ADP estimates and jobless claims.
Some offset was provided by upward revisions to the previous two months with the gain in February being revised up to 268,00 from 236,000 and in January to 148,000 from 119,000. However the cumulative upward revision of 61,000 did not offset the undershoot in the March gain.
The separate household survey ostensibly indicated greater strength in labour markets with the unemployment rate unexpectedly dropping to 7.6% rather than holding steady at February’s rate of 7.7%. However, the drop reflected a massive 496,000 drop in the labour force more that offsetting the 206,000 decline in household employment.
Government employment dropped 7,000 in March following a gain in February of 14,000 (previously reported as down 10,000) and 16,000 drop in January (-21,000 previously). This implied a 95,000 gain in private employment following gains of 254,000 (246,000 previously) and 164,000 (140,000 previously) in February and January, respectively.
Within private sector employment, good-producing jobs increased only 16,000 which was down from the 73,000 increase in February. The increase was tempered by a 3,000 drop in manufacturing employment and job growth in construction slowing to 18,000 from the 49,000 jump in February.
Growth in U.S. service-producing jobs slowed as well to 79,000 from a 181,000 increase in February. The increase was tempered by a 24,100 drop in employment in the retail trade sector. However, most major sectors showed a slowing in job growth with the exception of the education and health services component which generated 44,000 jobs in March up from 31,000 in February.
The index of aggregate weekly hours encouragingly managed to increase a robust 0.3% following a 0.5% gain in February benefiting from the hours worked measure unexpectedly rising to 34.6 hours from 34.5 hours in February. This implies that though firms were seeing rising demand, they opted to have the current workforce work longer rather than take on new workers. This could reflect the uncertainty about the impact of the forced government expenditure cutbacks, i.e., sequestration, that went into effect March 1.
