It looks like the economic recovery might not be the sure thing that investors have come to believe. The March payrolls report disappointed substantially to the downside with a reading of 121,000 jobs for the month. This compares to the analyst estimate of 201,000. The government is contributing negatively to job growth and the private sector just isn’t pulling its weight the way most expect. It’s safe to say that job’s growth remains tepid at best. Equity markets are closed today, but futures are off about -1.4% on the news. Econoday has a nice summary of the report:
“Today’s jobs report was clearly disappointing though the unemployment rate dipped to 8.2 percent. Payroll jobs in March advanced a modest 120,000, following increases of 240,000 in February (originally 227,000) and 275,000 in January (prior estimate up 284,000). The net revisions for January and February were up 4,000. Analysts expected a 201,000 increase for March.
Private payrolls were barely stronger than overall, rising 121,000 in March after a 233,000 increase the prior month. The median market forecast was for a 224,000 advance. Goods-producing was moderately strong while service-providing was very sluggish. Retail trade employment actually declined.
Goods-producing industry employment rose 31,000 after a 29,000 gain in February. For the latest month, manufacturing increased 37,000; construction dipped 7,000; and mining nudged up 1,000.
Private service-providing industry employment rose only 90,000, following a 204,000 boost in February. The big negative was a 34,000 decline in retail trade, somewhat conflicting with recently moderately favorable data on retail sales.
The public sector continued to shrink but just barely, slipping 1,000 in March after a 7,000 increase in February.
Average hourly earnings rose 0.2 percent, following a 0.3 percent gain in February. Expectations were for a 0.2 percent gain. The average workweek for all workers in March slipped to 34.5 hours from 34.6 in February. Analysts projected 34.5 hours for March.
From the household survey the dip in the unemployment rate to 8.2 percent from 8.3 percent reflected a 164,000 decline in the labor force. Household employment slipped 31,000. The median market forecast for the unemployment rate was for 8.3 percent in March.”