March Non-Farm Payrolls Up 88,000; Jobless Rate 7.6%

WASHINGTON — The March employment report showed after adjusting for prior month revisions payrolls remain weak (an 88,000 gain in March and a 61,000 rise from revisions), partly because seasonal adjustment became more restrictive; unemployment remains high at 7.6% and its decline stems from less labor force participation that probably reflects disgust with the slow jobs market; hours and pay are slow, implying there will be a string of weak production and income numbers ahead.

The March employment report is only slightly better underneath the plus-88,000 payrolls number. The January-February revisions totaled plus-61,000 on net. Seasonal adjustments, previously fairly neutral for March overall payrolls, massively reduced the 759,000 unadjusted job gain this year.

The unemployment rate fell 0.1-point to 7.6% and was even slightly better unrounded. However, there was a drop in participation across sectors, with the overall participation rate down 0.2 point to 63.3%.

Hours edged up, private earnings down. This means production and income data should be mixed ahead.

March payroll composition: manufacturing fell 3,000, construction rose 18,000, retail dropped 24,100, temporary help grew 20,300, leisure added 17,000 jobs, healthcare increased 23,400, and government slid7,000 (Federal and Postal Service fell).

Bottom line: the Q1 average jobs gain was 168,000 per month, versus a 209,000 monthly increase in Q4 -- not the proper direction. The Fed is likely to keep the pressure on after this report.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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