Employers added 192,000 jobs in March and the unemployment rate held steady at 6.7 percent, the government said Friday in a report that suggested the economy shrugged off bad winter weather and showed its underlying strength.
Following soft numbers in January and February, analysts had expected a rebound in hiring for March and the numbers, combined with revisions to prior-months data, were in line with consensus forecasts from mainstream economists.
"The job market is back on track after being sidetracked by the brutal winter weather,” said Mark Zandi, chief economist for forecaster Moody’s Analytics. “The economy is back to creating close to 200,000 jobs per month, which is resulting in a steadily tightening job market. Unemployment will continue to decline at this pace of job growth, and … is low enough that wage growth has begun to pick up, which is attracting more people back into the labor force.”
February’s first estimate of 175,000 jobs was revised upwards by the Labor Department by 22,000 jobs, putting hiring at 197,000 and roughly where the March numbers came in. January numbers were revised up by 15,000, from 129,000 to 144,000.
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Those revisions suggest winter weather wasn’t as big a hit on hiring as feared. But winter’s impact was more felt in the measure of hours worked. The average workweek for all workers grew by 0.2 hours in March, reversing a net decline over three consecutive prior months.
“Some of the decline in those months was likely due to unusually severe winter weather, including the major snowstorm that hit during the survey week in February,” said Jason Furman, head of the White House Council of Economic Advisers. “Consistent with the unwinding of weather effects, the average workweek in manufacturing jumped in March and returned to its 68-year high.”
The unemployment rate was unchanged in March at 6.7 percent, and the labor force participation rate inched up slightly to 63.2 percent. Most alternative measures of employment and underemployment held steady, suggesting that stress in the labor markets remains elevated. The number of long-term unemployed, out of work for 27 weeks or longer, stayed anchored around 3.7 million.
Within the numbers, there were encouraging signs that the economy continues moving into a higher gear. Professional and business services hiring rose by 57,000 last month, pointing to improvement in the white-collar sector. And temporary help services, often a harbinger of future hiring, improved by more than 28,000 jobs. Retailers, a loser in the cold months of January and February, added more than 21,000 jobs last month.
“All the preconditions for even better job growth this spring are in place,” said Zandi.
The struggling construction sector, slowed by challenges to homebuilding and commercial real estates, posted a gain of 19,000 months. That stands out, especially compared to the labor-intensive manufacturing sector, which shed 1,000 jobs last month.
“While this was disappointing, the good news was that manufacturers added 15,000 workers more than previously estimated in January and February,” said Chad Moutray, chief economist for the National Association of Manufacturers. “Since August, the manufacturing sector has averaged 12,125 additional workers each month, a sign that the rebound that we have seen since the beginning of the third quarter has resulting in a pickup in hiring.”
There are reasons to think the March decline was not the start of a trend, he said.
“Given the recent rebound in new orders and production seen in other economic indicators, the consensus had been for modest gains last month,” Moutray said, adding that “the longer-term trend continues to support the lift in manufacturing activity and hiring seen since August.”
The stronger March numbers also led Republican critics of the Obama administration to soften their tone and look past a stronger one-month showing.
“I’m glad more Americans have found work, but our economy still isn’t creating jobs for the American people at the rate they were promised,” House Speaker John Boehner, R-Ohio, said in a statement.
With monthly hiring back in the trend range of 175,000 to 200,000, the Federal Reserve is likely to stick to its timetable for removal of economic stimulus. The Fed has been tapering back its purchases of government and mortgage bonds to support the economy, now at a pace of $55 billion a month.
The central bank’s policy arm, the Federal Open Market Committee, is expected to end the bond buying late this year or early next year. Friday’s numbers were neither strong enough to accelerate the timetable nor weak enough to delay it. And they did nothing to change the view that interest rate hikes won’t begin until well into 2015.
“If you are a dove on the FOMC, you can point to the rise in participation, steady unemployment rate and flat growth in earnings as a way to reiterate the idea that rate hikes remain in the distance,” said Neil Dutta, head of U.S. economics for Renaissance Macro Research in New York. “If you are a hawk on the FOMC, there is nothing in this report to suggest that tapering should not continue.”