| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Nonfarm Payrolls - M/M | 200,000 | 150,000 to 230,000 | 303,000 | 275,000 | 270,000 |
| Unemployment Rate | 3.9% | 3.8% to 3.9% | 3.8% | 3.9% | |
| Private Payrolls - M/M | 170,000 | 125,000 to 180,000 | 232,000 | 223,000 | 207,000 |
| Manufacturing Payrolls - M/M | 7,000 | 0 to 10,000 | 0 | -4,000 | -10,000 |
| Participation Rate | 62.5% | 62.5% to 62.5% | 62.7% | 62.5% | |
| Average Hourly Earnings - M/M | 0.3% | 0.2% to 0.4% | 0.3% | 0.1% | 0.2% |
| Average Hourly Earnings - Y/Y | 4.1% | 4.0% to 4.1% | 4.1% | 4.3% | |
| Average Workweek | 34.3hrs | 34.3hrs to 34.4hrs | 34.4hrs | 34.3hrs |
Highlights
Nonfarm payrolls increased 303,000 in March after a small downward revision to 270,000 in February and an upward revision to 256,000 in January. The net upward revision is 22,000 for the prior two months. The March increase is well above the consensus of up 200,000 in the Econoday survey of forecasters. Private payrolls rose 232,000 in March with government up 71,000.
Private goods-producers' payrolls increased 42,000 in March, mainly due to a 39,000 rise in construction while manufacturing payrolls were unchanged and mining and logging were up 3,000. Private service-providers' payrolls rose 190,000 in March with over 2/3 of these jobs from gains of 88,000 gain in education and health services and 49,000 in leisure and hospitality. Government payroll gains mainly reflected hiring of 49,000 at the local level.
Average hourly earnings rose 0.3 percent month-over-month and were up 4.1 percent year-over-year. The gain versus a year ago is the lowest since up 3.9 percent in June 2021. If the pace of wage growth is slowing, it remains above the inflation rate.
The unemployment rate is down a tenth to 3.8 percent, mostly due to rounding. The unrounded rate is 3.829 percent in March from 3.857 percent in February, suggesting unemployment is essentially unchanged. March's rate last year was 3.5 percent. The U-6 unemployment rate the most inclusive rate of unemployment in the household survey is unchanged at 7.3 percent. March and February are the highest since 7.3 percent in December 2021. Although unemployment has crept a bit higher in the past year or so, it remains consistent with a tight labor market.
The labor participation rate rose 2 tenths to 62.7 percent in March and reflects an increase in the labor force. The labor force rose 469,000 to 167.895 million in March on an increase of 498,000 in the number of persons employed and a decrease of 29,000 in the number of person unemployed.
The number of persons working part-time for economic reasons fell 68,000 to 4.308 million in March. The number of job losers fell 174,000 to 3.042 million in March while job leavers were up 112,000 to 823,000. This points to fewer layoffs and workers willing to risk leaving one job for another, both signs of a healthy labor market.
This is yet more data confirming that labor market conditions remain tight and consistent with economic expansion which the FOMC will take into account in setting monetary policy. Even if the inflation data show further progress toward reaching the two percent objective for price stability, the strength of the labor market will counsel against moving too quickly to ease monetary policy.
Private goods-producers' payrolls increased 42,000 in March, mainly due to a 39,000 rise in construction while manufacturing payrolls were unchanged and mining and logging were up 3,000. Private service-providers' payrolls rose 190,000 in March with over 2/3 of these jobs from gains of 88,000 gain in education and health services and 49,000 in leisure and hospitality. Government payroll gains mainly reflected hiring of 49,000 at the local level.
Average hourly earnings rose 0.3 percent month-over-month and were up 4.1 percent year-over-year. The gain versus a year ago is the lowest since up 3.9 percent in June 2021. If the pace of wage growth is slowing, it remains above the inflation rate.
The unemployment rate is down a tenth to 3.8 percent, mostly due to rounding. The unrounded rate is 3.829 percent in March from 3.857 percent in February, suggesting unemployment is essentially unchanged. March's rate last year was 3.5 percent. The U-6 unemployment rate the most inclusive rate of unemployment in the household survey is unchanged at 7.3 percent. March and February are the highest since 7.3 percent in December 2021. Although unemployment has crept a bit higher in the past year or so, it remains consistent with a tight labor market.
The labor participation rate rose 2 tenths to 62.7 percent in March and reflects an increase in the labor force. The labor force rose 469,000 to 167.895 million in March on an increase of 498,000 in the number of persons employed and a decrease of 29,000 in the number of person unemployed.
The number of persons working part-time for economic reasons fell 68,000 to 4.308 million in March. The number of job losers fell 174,000 to 3.042 million in March while job leavers were up 112,000 to 823,000. This points to fewer layoffs and workers willing to risk leaving one job for another, both signs of a healthy labor market.
This is yet more data confirming that labor market conditions remain tight and consistent with economic expansion which the FOMC will take into account in setting monetary policy. Even if the inflation data show further progress toward reaching the two percent objective for price stability, the strength of the labor market will counsel against moving too quickly to ease monetary policy.
Market Consensus Before Announcement
A 200,000 rise is the call for nonfarm payroll growth in March versus 275,000 in February which was higher than expected but included a sharp downward revision to a still strong 229,000 in January. Average hourly earnings in March are expected to rise 0.3 percent on the month for a year-over-year rate of 4.1 percent; these would compare with February's rates of 0.1 percent on the month and 4.3 percent on the year. March's unemployment rate is expected to hold unchanged at February's 3.9 percent which was higher than expected.
Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.
Description
If ever there was an economic report that can move the markets, this is it! The anticipation on Wall Street each month is palpable, the reactions can be dramatic, and the information for investors is invaluable. By digging just a little deeper than the headline unemployment rate, investors can take more strategic control of their portfolio and even take advantage of unique investment opportunities that often arise in the days surrounding this report.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy. Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of opponents of easy monetary policy. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
Importance
The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month. Additionally, the Fed has made 6.5 percent unemployment a threshold for considering changes in policy - both for quantitative easing and the fed funds rate. And the Fed has emphasized that it is overall labor market conditions that matter - not just a specific number.
Interpretation
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
Nonfarm payroll employment indicates the current level of economic activity. Increases in nonfarm payrolls translate into earnings that workers will spend on goods and services in the economy. The greater the increase in employment, the faster is the total economic growth. When the economy is in the mature phase of an expansion, rapid increases in employment cause fears of inflationary pressures if rapid demand for goods and services cannot be met by current production.
When the average workweek trends up, it supports production gains in the current period and portends additional employment increases. When the average workweek is in a declining mode, it probably is signaling a potential slowdown in employment growth-or even outright declines in employment in case of recession.
Gains in average hourly earnings represent wage pressures. It is worth noting that these figures aren't adjusted for overtime pay or shifts in the composition of the workforce, which affects wages on its own. Market participants believe that a rising trend in hourly earnings will lead to higher inflation. But if increased wages are matched by productivity gains, producers likely will not increase product prices with wages because their unit labor costs are stable.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy. Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of opponents of easy monetary policy. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
Importance
The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month. Additionally, the Fed has made 6.5 percent unemployment a threshold for considering changes in policy - both for quantitative easing and the fed funds rate. And the Fed has emphasized that it is overall labor market conditions that matter - not just a specific number.
Interpretation
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
Nonfarm payroll employment indicates the current level of economic activity. Increases in nonfarm payrolls translate into earnings that workers will spend on goods and services in the economy. The greater the increase in employment, the faster is the total economic growth. When the economy is in the mature phase of an expansion, rapid increases in employment cause fears of inflationary pressures if rapid demand for goods and services cannot be met by current production.
When the average workweek trends up, it supports production gains in the current period and portends additional employment increases. When the average workweek is in a declining mode, it probably is signaling a potential slowdown in employment growth-or even outright declines in employment in case of recession.
Gains in average hourly earnings represent wage pressures. It is worth noting that these figures aren't adjusted for overtime pay or shifts in the composition of the workforce, which affects wages on its own. Market participants believe that a rising trend in hourly earnings will lead to higher inflation. But if increased wages are matched by productivity gains, producers likely will not increase product prices with wages because their unit labor costs are stable.
