US economy adds 126,000 jobs in March but unemployment sticks at 5.5%

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The US economy added 126,000 jobs in March – but the unemployment rate was unchanged at 5.5%.

The March jobs report failed to meet expectations; although economists had expected the unemployment rate to hold steady at 5.5%, which it did, they had predicted that the non-farm payroll would grow by 245,000 jobs.

The disappointing jobs report comes after 12 straight months of the US economy adding over 200,000 jobs a month.

The Labor Department also revised its jobs data from January and February. January’s additional-jobs number was revised down from 239,000 to 201,000, and February’s from 295,000 to 264,000.

“With these revisions, employment gains in January and February combined were 69,000 less than previously reported. Over the past three months, job gains have averaged 197,000 per month,” according to the report.

The number of unemployed Americans remained little changed at 8.6 million.

In 2014, the US added 3.1m jobs – or 260,000 jobs per month. Last year was the best year for job growth since 1999.

The slowdown in hiring was in part due to the harsh winter weather. Manufacturing, construction and government sectors all saw a slight drop in workers.

Other contributing factors were a strong dollar and the west coast port shutdown, said Gus Faucher, senior economist at PNC.

The number of Americans participating in the labor force in March dropped by 96,000, causing the labor participation rate to drop from 62.8% in February to 62.7%. This could imply that Americans are still unsure about the US recovery.

While job growth did slow down in March, Faucher said US labor participation would likely improve in the coming months.

“I think that will move higher over the course of 2015, even if we are adding 200,000 jobs per month, which is what we have added over the past three months. That’s a good number. That’s more than we need to keep up with normal growth in the labor force,” he said.

PNC economists predict that this year’s monthly job growth will average 250,000 jobs a month and that the unemployment rate will drop to 5% by the end of 2015.

The one bright spot in the March job report was average hourly earnings, which rose to $24.86, said Faucher. Over the past 12 months, average hourly earnings have risen by 2.1%.

The increase in wages comes after higher minimum wages have been implemented by number of local and state governments. Walmart, Target and McDonald’s have also announced that they will be raising wages for their employees. These raises have yet to be reflected in the jobs report, as Walmart’s will only go in effect this month.

These pay increases – ranging from $1 by McDonald’s to $1.75 by Walmart – are not likely to improve overall wage growth numbers, warned Elise Gould, senior economist at the Economic Policy Institute.

They might, however, be enough to lure discouraged workers back into the labor market.

“I think that’s what some people have been waiting for: ‘Well, is it worth it, given what I could earn?’ But with better wage gains, then you have more people looking for work,” said Faucher.

At 60.8%, participation rate for black Americans was lower than the overall labor participation rate. Their unemployment rate was 10.1% – more than double the white unemployment rate of 4.7%.

The number of American workers who wanted a full-time job but were only able to find a part-time one was 6.7 million. About 7.26 million Americans held more than one job. About 3.87 million of them had one full-time job and one part-time job.

“Our economy has grown since the crisis, but if you look at what’s happened to middle-class folks, their wages, their incomes, just haven’t gone up that much. A lot of folks are still struggling to get by,” Barack Obama said on Thursday while in Louisville, Kentucky.

During his speech, the president touted the 12m new jobs created in the US over the last five years. He attacked Republicans for their budget proposals, which he said would cut job training for 2.2 million people.

“That’s just not the right way for us to plan in terms of long term and stability,” he said. “Our economy has been growing. We’ve got momentum, but that momentum can stall, because the economies in Europe are weak. The economies in Asia are weak. The dollar is becoming stronger … We’ve got to stay humming.”

Powered by article was written by Jana Kasperkevic in New York, for on Friday 3rd April 2015 13.31 Europe/ © Guardian News and Media Limited 2010


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