U.S. NF Payroll Showed Only a 126K Gain in March | USD Falls

After six consecutive months of over 200K job gains, the recent U.S. non farm payroll presented came short with only 126K added jobs – well bellow market expectations. Tthe ADP report showed a gain of 189K jobs and the market estimates were set at 246K, for March. According to the latest U.S. employment report, the main sectors that increased were in food services and drinking places, professional and business services, health care, and retail trade. Conversely, the mining sector lost jobs. The rate of unemployment remained unchanged at 5.5%. The financial markets were closed so the reaction is likely to be noticed on Monday.   

The chart below presents the revised figures of the added number of non-farm employees in the labor market in past years (up to March 2014). The non-farm payroll in February and January were revised down by a total of 69K than previously reported. This revision comes after the February report initially showed a gain of 295K jobs.

It seems that the low energy prices have started to take their toll on the U.S. labor market, while some analysts have also suggested that harsh winter conditions have also adversely affected the hiring process in recent months. But the big question will be whether the low oil prices have a positive impact on the U.S. labor market – if people and companies don’t use the excess cash they have from low oil prices to consume and invest, respectively, but rather to de-leverage; then the low oil prices could actually have a negative impact on the U.S. labor market.

U.S. Nonfarm payroll employment up to 2015  April 4In March, the rate of U.S. unemployment remained flat 5.5%. This unemployment rate is 1.2 percent points below the rate recorded in March 2014.

Nonetheless, the number of unemployed persons (8.575 million) dropped again by 274K in March compared to the preceding month. A closer look reveals that the civilian labor force contracted by 96K. So there was a fall in both the number of unemployed and the number of people participating in the labor force; the participation rate inched down to 62.7%.

Finally, wages also rallied again – the hourly earnings increased to $24.86 per hour – a 9 cents bump, month over month; it’s also 2.1% higher than the same month last year. Even though the annual growth rate in wages hasn’t risen by much, this is still a good indication for the progress of the U.S. labor market.

This time, the NF payroll report was released on Good Friday so the markets were closed. But the U.S. dollar did depreciate against leading currencies.

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