The latest U.S. non-farm payroll showed a slightly higher than expected headline figure: 215K jobs in March compared to the ADP’s anticipated a gain of 200K jobs and market expectations of 206K. The growth in wages inched up to 2.3% as wages rose by 7 cents, month over month. The main sectors that expanded were in health care and social assistance, retail trade, construction, and health care, while manufacturing and mining recorded job loss. The rate of unemployment ticked up for the first time since May 2015 to 5%. The U.S. dollar is slightly up against other majors; gold and silver are down. Let’s examine this report:
The U6 unemployment measurement, a broader measure of unemployment, ticked up again to 9.8%. In terms of revisions, there was a total downward revision of 1K for February and January combined.
In March, the rate of U.S. unemployment was 0.5 percent points below the rate recorded in March 2014.
The number of unemployed persons also (7.966 million) rose by 151K in March compared to the previous month. But the civilian labor force also increased by 191K. So there was a gain in number of people participating in the labor force and an increase in the number of unemployed. In any case, the participation rate edged up again to 63%.
Finally, wages rallied in March compared to February – the hourly earnings reached $25.43 per hour — a gain of 7 cent or 0.3%, month over month; wages rose by an annual gain of 2.3%, year on year – a moderately higher rate than in previous month.
The recent NFP report didn’t make things much simpler for the market as it came as a mixed bag: Wages and jobs were up, but the unemployment rate (as measured by U3 and even U6) ticked up. So the labor market is progressing but this also suggests a higher chance of a rate hike by the Fed in the coming months.
For further reading: