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April 08, 2019

Economy Watch: US Adds 196,000 Jobs In March

The unemployment rate remained at 3.8%.

By  Christopher Ruvo

The U.S. economy added 196,000 jobs in March, beating the expectations of economists and helping to calm concerns that a recession could be imminent following a weak February employment report. Economists had predicted that non-farm payrolls would rise by 180,000 last month.

The unemployment rate remained at 3.8%. The labor market was favorable for jobseekers, as jobless claims dropped to a 50-year low recently (see tweet below). There are approximately 7.58 million open jobs in the economy – not good for employers, but potentially beneficial for those in search of work and a likely sign that positive economic activity is continuing.

Last month, the professional and business services sector added 37,000 jobs, while government payrolls increased by 14,000 positions. Construction jobs were up by 16,000 following a decline in February. The leisure and hospitality sector bolstered its ranks by 33,000 jobs last month, a jump propelled by 27,300 hirings at restaurants and bars. The sore spot for March came in manufacturing, which lost 6,000 jobs amid contraction in the automotive category.

Meanwhile, in March, average hourly earnings increased 0.1%, down from 0.4% in February. While that lowered the annual rate of wage increase from 3.4% to 3.2%, the rate was at a level that will affirm the Federal Reserve’s decision to suspend further interest rate increases this year. For households, the macro factors mean inflation could remain in check in the months ahead, which could help drive consumer spending.

The March jobs showing in the U.S. constituted a rebound following a February in which only 33,000 positions were added – the least since September 2017. Winter weather, the now-ended partial government shutdown, trade disputes with China, a wind down of the stimulus from the Trump administration’s $1.5 trillion tax cut package, and other factors may have contributed to February’s paltry employment numbers.

Currently, analysts predict that the U.S. economy will have grown between 1.4% and 2.1% at an annualized rate in the just-ended first quarter. Final numbers for the quarter are not yet available.

“The first quarter has been challenging, but the economy has better momentum entering the second quarter,” Roiana Reid, an economist at Berenberg Capital Markets in New York, told Reuters.

The data on jobs and first quarter gross domestic product are relevant to the promotional products industry, which tends to trend in the relative direction of macroeconomic growth or contraction.