U.S. Jobs Growth Slowed In March And the First Quarter

After a year of strong monthly jobs growth, non-farm payrolls grew by just 126,000 in March, leading many economists and other observers to express concern about the strength of the current recovery in the U.S. Of course, in the perverse way equities markets move, the stock market rose and bond yields fell, as traders took the news as a sign the Federal Reserve would hold off raising interest rates. The U.S. Bureau of Labor Statistics, which compiles the data, also revised employment growth down in January and February by a total of 69,000.

Average monthly jobs growth slowed to 197,000 in the first quarter, down from an average of 260,000 a month last year. And that included an average of only 193,000 in the first quarter 2014, when employment growth was also affected by inclement weather.

Manufacturing and construction jobs growth was flat—both off 1,000—while mining and logging shed 11,000 jobs. Manufacturing production growth has slowed, in part as a result of the strong dollar. Construction has been affected by the winter weather.

Services did better, with good jobs growth in retail trade, professional and business services and healthcare. Foodservice added dramatically fewer jobs in March than in February, only 9,000 vs. 66,000.

Wages rose 0.3%, although average weekly hours shrunk 0.1%. For the past 12 months, wages have risen only 2.1%, but the March increase is higher than the 12-month average.

Jobs are not the only economic indicator that has signaled slowing growth in recent months. Retail sales and consumption spending, durable goods orders, manufacturing, capacity utilization and other signs also have been negative or flat during the first quarter of this year. We will just have to wait and see if another rebound follows the lull, as happened last year.