WASHINGTON – March payrolls came in well below expectations, while the unemployment rate fell below what most policymakers consider full employment. Weather likely played a role pulling down retail employment again last month.
The Bureau of Labor Statistics Friday reported March payrolls rose just 98,000 -- the least since May of last year - when 175,000 had been expected. Revisions to the previous two months also fell by a combined 38,000 with February revised down to 219,000 and January revised down to 216,000.
The unemployment rate ticked down two-tenths to 4.5%, the lowest since April 2007, while the participation rate held steady at 63.0%.
Weather may have played a factor with Winter Storm Stella hit the East Coast during the employment survey reference week, as well as large shifts in national temperatures.
"The weather may have had some effect on construction but we can't tell that from the data," BLS chief of labor statistics Dori Allard told Market News International. The nearly flat construction number for March, however, followed an exceptionally strong 69,000 gain in February.
The Federal Reserve is likely to look at this report as a one-off and stay on track to raise rates two more times this year. The minutes of the latest FOMC meeting said "Nearly all participants judged that the U.S. economy was operating at or near maximum employment."
For three months, payrolls averaged a monthly gain of 178,000, down from that of all of last year of 187,000.
It is worth noting, Allard said, that health care is running below its 2016 trend, rising at an average of 20,000 a month compared to last year's 32,000. In March the health care category of payrolls rose only 14,000.
The over-the-year rise in average hourly earnings was up 2.7% for the broadest series and 2.3% for the oldest non-supervisory series.
The financial activities series posted a 9,000 gains, about in line with the average monthly gain over the previous 12 months.
Professional and technical services was up 56,000, also in line with average monthly gains over the past 12 months.
The average workweek for all employees was unchanged at 34.3 hours in March, while in manufacturing, the workweek edged down by 0.2 hours to 40.6 hours.
