• Non-farm payrolls rose 196,000 in March, unemployment was steady at 3.8%
  • Wage increases moderated, on the month 0.14% and annually 3.2%, down from 3.4% in February
  • Report eases worries over February's revised 33,000 NFP

The US labor market returned to form in March adding 196,000 non-farm jobs, better than the 180,000 forecast and easing concerns that February's weakness and a lackluster ADP report might herald a slowdown in employment. 

Reuters

Annual wages gains, expected to be unchanged at 3.4%, moderated to 3.2% but increases remain at the top of their 10-year range. The monthly addition was 0.14%, below the 0.3% prediction and the 0.4% February increase.

Reuters

The U-3 unemployment rate was stable at 3.8% as expected and the underemployment or U-6 rate, which has a more expansive definition, was also steady at 7.3%. This rate is down from 7.9% 12 months ago. 

Reuters

Average weekly hours were static at 34.5. This statistic can be an early sign of employment pressures as firms will often increase the hours of existing workers before hiring new employees. The labor force participation rate slipped 0.2% to 63.0%. It too is at the top of its post-recession range.

Concerns that February’s poor payroll might be the start of a downturn in job creation had been seconded by ADP’s weak March result of 129,000 which was well below the 170,000 forecast.

In reality, except for the February NFP itself the possibility that the job market had turned was limited for several reasons. First, one month diversions are common in the payroll numbers.  Over the past five years the lowest results are as follows: 2018-September 108,000; 2017-September 18,000; 2016-May 15,000; 2015-March 77,000 and 2014-February 168,000.

In each case the subsequent two months were at or better than trend: 2018, 277,000 in October and 196,000 in November; 2016, 260,000 in October and 220,000 in November; 2015, 300,000 in April and 319,000 in May; 2014, 250,000 in March and 327,000 in April. 

Second the ADP-NFP correlation while accurate for long term trends encounters statistical noise when month to month comparison are made.  In March the NFP plunge was twinned with ADP’s robust 197,000. The March NFP of 196,000 was matched with the ADP’s weak 129,000.

Reuters

Finally the employment indexes from the Institute for Supply Management which are part of their purchasing managers’ surveys were securely over the 50 expansion/contraction division in March.

The index for the manufacturing sector, about 15% of US GDP, was 57.5 last month easily beating February’s 52.3 level and the median prediction for 52.4. Employment in the much larger service sector rose to 55.9 from 55.2 in February.

Reuters

Reuters

While both indexes are below their 2018 highs, 60.5 for services in January and 59.2 for manufacturing in February, those scores are records in themselves. An all-time series high for the 22 year old services employment index and the third highest in 8 years for the 71 year old manufacturing survey.

The US economy cooled substantially at the end of 2018 registering 2.2% annualized in the fourth quarter from 3.4% prior and giving last year a quarterly average of 3%.  The Atlanta Fed GDPNow model has that slower pace continuing in the first quarter at 2.1%. 

Job creation averaged 233,300 in the fourth quarter and with a comparable GDP rate in the now completed first quarter it is not surprising that new employment has maintained a similar pace, lowered only by February’s quirk.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD below 1.1200 on Draghi's dovishness, amid Trump-Xi meeting announcement

EUR/USD is trading below 1.1200 after ECB President Draghi opened the door to rate cuts. Presidents Trump and Xi will hold an extended meeting at the G-20 Summit. The news cheered markets.

EUR/USD News

GBP/USD hovers above 5-month lows ahead of Conservative leadership contest

GBP/USD is hovering above 1.2500, close to the five-month lows. Conservatives will vote in the second round of their leadership contest. Boris Johnson is set to win again.

GBP/USD News

USD/JPY rallies beyond mid-108.00s on Trump's positive comments

Trump said he will have an extended meeting with the Chinese President next week. This comes on the back of Draghi's dovish comments and triggers risk-on trade. Fading safe-haven demand weighs heavily on the JPY and remained supportive.

USD/JPY News

Fed Preview: Proto-easing

Fed Funds 2.25%-2.50% target range predicted to be unchanged. Market expecting confirmation of easing bias into the second half. FOMC statement wording, especially "patient" and the economic projections important.

Read more

Gold surges through $1350 level, back closer to 14-month tops

Gold built on its strong intraday positive momentum and spiked to fresh session tops, beyond the $1350 level during the early North-American session.

Gold News

Majors

Cryptocurrencies

Signatures