So much for economists’ predictions that unemployment would be 180,000 in March. Instead, the Labor Department’s report showed a gain of only 98,000 jobs for the month.
Part of the reason for the less-than-cheery Labor Department news was the 30,000 jobs lost in the retail sector. We’re still seeing contraction here with major chains closing hundreds of stores.
We had to expect this, as stores like JC Penney announced plans to shutter 130 to 140 stores and offer buyouts to 6,000 employees. Sears is closing stores, and Macy’s cut 10,000 jobs. Then Family Christian announced it was going out of business, leaving 3,000 people in 240 stores without a job.
These announcements are part of a much bigger trend that we’ve seen all over the country. Growth of online sales has really hurt brick and mortar stores. While about 30,000 retail jobs were lost in March, online retailers added 2,200 employees.
Another reason we saw slower growth in March was inclement weather. A severe winter storm struck during the Labor Department’s survey week. Those that missed paychecks that week may not have been counted in the survey.
In fact, according to Goldman Sachs, the jobs number could have been 30,000 to 60,000 higher if not for the issue of weather.
"We believe the sharp drop in temperatures and the early-month winter storms will depress payroll growth in weather-sensitive categories. Winter Storm Stella impacted the Midwest and East Coast early in the payroll survey week — and much of the snow that accumulated during the storm did not melt until Thursday or Friday. We believe the weather impact could be particularly large in comparison to February, which was marked by unseasonably warm weather and limited snowfall," they wrote.
Overall, though the health of the labor market appears intact with the unemployment rate at a 10-year low of 4.5% from 4.7%, suggesting progress. There were also no changes to the participation rate, which remained at 63% with 94.2 million Americans out of work.
Retail aside, professional and business service jobs jumped by 56,000. Mining gained 11,000. Healthcare added 14,000 jobs. Americans finding jobs in financial positions picked up by 9,000. Construction added 6,000 jobs following a February 2017 gain of 59,000.
Another sign of a stronger jobs market is wage growth, which was up 2.7% year over year, indicating that more jobs are being added or Americans are upgrading from part-time employment for higher paying jobs.
It’ll be interesting to see how the Federal Reserve views such growth.