Friday, April 5th, 2024
The most highly anticipated economic print of the week is out this morning. The Employment Situation report — non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) reached +303K for the month of March, more that 50% higher than the 200K expected, and +33K higher than the downwardly revised +270K the previous month. This is the highest print since matching 303K exactly back in May of last year. The Unemployment Rate ticked down to +3.8% from the +3.9% posted a month ago.
Hourly wages last month grew as expected, +0.3%, up from +0.2% in February. Year over year, wage gains matched expectations at +4.1%, down 20 basis points (bps) month over month and the lowest print since June 2021 — nearly three years ago. This is an initial salve from the bracing headline number: usually, higher-than-expected jobs numbers spell a “buyer’s market” — meaning employees have room to demand higher wages — but to see shrinking hourly wage levels is the best of both worlds: moving towards full employment while not having to pay much higher rates to do so.
Labor Force Participation popped +20 bps to 62.7%. This metric had been a fly in the overall positive jobs data ointment, but is back to more reassuring levels we saw mid-last year regarding able-bodied Americans in the workforce. The Average Workweek ticked up 10 bps to 34.4, while the U-6 (aka “real unemployment”) stayed at +7.3% for the second month in a row. None of these numbers are launching into space or falling through the floor; despite surprising headlines, jobs numbers are still moving in steady increments.
Education/Healthcare produced the most jobs last month: +88K. This was followed by +71K in Government (including public education jobs), Leisure/Hospitality with +49K, Construction at +39K and Trade/Transportation/Utilities +27K. We depict something of a sea-change here: over the past couple years, Leisure & Hospitality had been re-supplying their hard-hit industry from the pandemic, but is now growing at a much more subdued pace. And while Construction brought forth a respectable number of new jobs last month, Manufacturing turned in a big fat 0.
The immigration situation now shows up in our labor market data. It was reported that last year added 5.2 million jobs due to a heavy influx of immigrants. By all accounts, immigration has not abated in our current year, so we expect these high levels to continue. This train of thought also bears out in our positive wage growth numbers in the face of higher-than-expected employment, which in some ways is the best of both worlds.
Pre-market indices bear this out. Whereas we did see an initial downturn in early morning gains on the BLS release, since then the Dow has grown from +6 points to +86, the Nasdaq +12 to +89 points, and the S&P 500 from +4 to +18. Obviously, this is coming off a big sell-off yesterday, and over the past week the major indices are down anywhere from -2% to -3%, but this may give today’s trading environment a little more bounce to the ounce. Tough to say whether we’ll finish the week in the green (we likely won’t) but we’ll take some new-found positivity.
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BLS Jobs +303K, Higher than Expected; Pre-Markets OK
Friday, April 5th, 2024
The most highly anticipated economic print of the week is out this morning. The Employment Situation report — non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) reached +303K for the month of March, more that 50% higher than the 200K expected, and +33K higher than the downwardly revised +270K the previous month. This is the highest print since matching 303K exactly back in May of last year. The Unemployment Rate ticked down to +3.8% from the +3.9% posted a month ago.
Hourly wages last month grew as expected, +0.3%, up from +0.2% in February. Year over year, wage gains matched expectations at +4.1%, down 20 basis points (bps) month over month and the lowest print since June 2021 — nearly three years ago. This is an initial salve from the bracing headline number: usually, higher-than-expected jobs numbers spell a “buyer’s market” — meaning employees have room to demand higher wages — but to see shrinking hourly wage levels is the best of both worlds: moving towards full employment while not having to pay much higher rates to do so.
Labor Force Participation popped +20 bps to 62.7%. This metric had been a fly in the overall positive jobs data ointment, but is back to more reassuring levels we saw mid-last year regarding able-bodied Americans in the workforce. The Average Workweek ticked up 10 bps to 34.4, while the U-6 (aka “real unemployment”) stayed at +7.3% for the second month in a row. None of these numbers are launching into space or falling through the floor; despite surprising headlines, jobs numbers are still moving in steady increments.
Education/Healthcare produced the most jobs last month: +88K. This was followed by +71K in Government (including public education jobs), Leisure/Hospitality with +49K, Construction at +39K and Trade/Transportation/Utilities +27K. We depict something of a sea-change here: over the past couple years, Leisure & Hospitality had been re-supplying their hard-hit industry from the pandemic, but is now growing at a much more subdued pace. And while Construction brought forth a respectable number of new jobs last month, Manufacturing turned in a big fat 0.
The immigration situation now shows up in our labor market data. It was reported that last year added 5.2 million jobs due to a heavy influx of immigrants. By all accounts, immigration has not abated in our current year, so we expect these high levels to continue. This train of thought also bears out in our positive wage growth numbers in the face of higher-than-expected employment, which in some ways is the best of both worlds.
Pre-market indices bear this out. Whereas we did see an initial downturn in early morning gains on the BLS release, since then the Dow has grown from +6 points to +86, the Nasdaq +12 to +89 points, and the S&P 500 from +4 to +18. Obviously, this is coming off a big sell-off yesterday, and over the past week the major indices are down anywhere from -2% to -3%, but this may give today’s trading environment a little more bounce to the ounce. Tough to say whether we’ll finish the week in the green (we likely won’t) but we’ll take some new-found positivity.
Questions or comments about this article and/or author? Click here>>