Job Growth Bounces Back in March After Weak February
In February U.S. job gains came in at a surprisingly low 20,000 — or more than 150,000 less than expectations. Despite being revised upwards to 33,000, it remains the weakest month of gains since September 2017. However the just-released March figures show a return to form of sorts, once again exceeding economist estimates.
As CNN Business reports, the U.S. economy added 196,000 jobs in March. That’s nearly six times the number February brought even after the positive adjustment. The relatively strong results amounted to a first-quarter average of 180,000 jobs per month, which is down from the average 223,000 monthly rate seen in 2018. A 12-month average now sits at 211,000.
While jobs grew, the unemployment rate stayed unchanged from last month, sitting at 3.8%. Elsewhere year over year wage growth came in at 3.2%. Economists had anticipated a 3.4% YOY gain on the assumption that near-full employment rate would drive up wages as employers compete for top talent.
Shortly after the jobs report’s release this morning, President Trump spoke to reporters and once again criticized the Federal Reserve. Although the President noted “we’re doing very well,” he suggested that the economy would be booming if the Fed would cut interest rates. Trump told reporters, “They really slowed us,” adding that he personally thought rates should be cut and that, if they did so, “you would see a rocket ship.”
Obviously this isn’t the first time the President has taken aim at the Fed or his appointee Chairman Jerome Powell, although it is notable that the agency has already signaled that it would stop raising rates after initially expecting two more increases this year. That said Marketwatch notes that this month’s jobs report might actually give the Fed reason to continue with rate hikes. Scotiabank deputy chief economist Brett House told the site, “We continue to forecast two more rate hikes from the Fed, at end-2019 and in mid-2020.” At the same time, however, there are those who doubt such a move would come unless future reports were much stronger. For example Nomura chief U.S. economist Lewis Alexander said, “You will need to be something pretty dramatic to get them to go,” noting that he’s not currently expecting any Fed rate changes in 2019 or 2020.
March’s jobs rebound does lend credence to the theory that February’s report was a fluke — weather-related or otherwise. Nevertheless it does continue to signal a slowdown of the economy. That doesn’t necessarily mean that a recession is imminent but it does seem to suggest that growth won’t be the 3% that the President had hoped for. In any case it seems that this latest report turns eyes back to the Federal Reserve as the one-sided war between President Trump and the agency continues.