The U.S. economy may have only added a third of the jobs it did in February, but that’s okay.
The economy is on solid ground with its 90th consecutive months of job gains.
In fact, unemployment still stands at 4.1% with a labor force participation rate of 63% – a measure of the number of people who are working.
After an eye-popping add of 326,000 jobs in February, the addition of just 103,000 jobs may sound disappointing as a headline number.
But consider this.
On average, the U.S. added 188,000 jobs every month in 2017. For 2018, we’ve added an average of 202,000 jobs a month.
“We’ve had such unsustainably strong results in January and February that it was largely expected that we were due for some payback,” said Ellen Zentner, chief United States economist for Morgan Stanley, as quoted by The New York Times. “The weak number in headline payrolls does not change the fact that trend job growth is strong.”
However, according to Goldman Sachs, inclement weather may have kept many away from their jobs. In fact, according to the Bureau of Labor Statistics, 159,000 Americans were unable to work because of weather conditions.
“NOAA weather-station data indicate that snowfall was unusually high in March (on a population-weighted basis), and this followed unseasonably mild weather in February. While most of the accumulation occurred outside of the survey week, we nonetheless expect the incremental swing in snowfall to weigh on job growth, with an impact of between -30k to -60k relative to trend. One mitigating factor here is that much of the survey-week snowfall occurred in New England and upstate New York, regions more accustomed to severe winter weather.”
Month-to-month numbers can and will jump around. Not even the most trusted analysts on the Street accurately predict where it’ll be. As a matter of fact, most projections have been way off over the last two months.
In February 2018, for example, analysts called for 205,000 jobs. We got 313,000.
For March 2018, analysts predicted the addition of 185,000 jobs. We got 103,000.
For March, we saw an addition of 22,000 manufacturing jobs, 22,000 healthcare jobs, 9,000 mining jobs, 33,000 professional and business service jobs, and a decrease of 15,000 in construction.
Average hourly earnings did increase by eight cents to $26.82, pushing the annual gain to 2.7% from 2.6%. A slowdown in this number has eased concerns the Federal Reserve could become more aggressive with interest rate hikes.
Overall, the economy is chugging along at quite a healthy pace.
Stay tuned to The Cheap Investor for more.