Business hiring bounced back in March after a disappointing February, with 196,000 jobs added, surpassing economists’ expectations. The unemployment rate stayed flat at 3.8 percent, the Labor Department said Friday morning. while wage growth continued to slightly outpace inflation — encouraging news for just about everyone.
The numbers show “that growth might be slowing but underlying fundamentals remain strong,” said Joe Brusuelas, chief economist at accounting consultancy RSM.
Broad gains, except for manufacturing
The services sector led the gains in March. Education added 70,000 jobs, professional services added 37,000, and leisure and hospitality added 33,000.
But manufacturing slumped, losing 6,000 jobs in March after a flat February. “Given the global manufacturing slump, we expect further U.S. factory job losses over the next few months,” Paul Ashworth, chief U.S. economist at Capital Economics, wrote in a note.
Surpassed expectations
Economists had expected about 175,000 jobs to be added in March, after an unusually sluggish February. That month saw just 33,000 jobs added, according to revised figures released this month–just a tenth of the jobs added the month before. Economist blamed the unusually low numbers on February’s cold weather and the lingering hangover from January’s federal government shutdown.
On average, the economy has added 180,000 jobs a month for the past three months, showing it continues to pull in people from the sidelines.
Pay growth moderates
Wage growth was slower than in prior months. Average hourly wages rose 3.2 percent year-over-year, below their pace of growth this year.
Low inflation is one of the culprits behind lower-than-expected wage growth, economists say. Another is that businesses have been sweetening their job offers in non-financial ways, such as better benefits or more flexibility.
“When you look at base pay, employers haven’t been offering the big pay raises that we’ve seen in the past,” said Andrew Chamberlain, chief economist at Glassdoor.
Even so, wages are outpacing inflation, which is good news for household budgets.
“Job gains and good wage growth will push household spending higher in 2019; consumer spending accounts for two-thirds of the U.S. economy,” noted PNC chief economist Gus Faucher in an email after the numbers were released.
Harder to hire
The businesses looking for workers today are not having an easy time of it. There are currently about 1 million more open jobs in the U.S. than there are people looking for work, the government reported earlier this month
“When you have the unemployment rate as low as it is and demand as high as it is, it becomes more about companies relaxing some of their requirements. It’s drug checks, background checks,” said Teresa Carroll, executive vice president at Kelly Services, a global staffing firm.
The tight job market has also led employers to speed up the hiring process. Kelly recently introduced a chatbot that can screen potential workers and give them information about a job early in the application process. This can cut up to a week off the length of a typical hiring process, a Kelly spokesperson said.
Markets jump
Stock markets rose slightly on the news. The Dow Jones opened 66 points or 0.2 percent higher, and the S&P 500 gained 8 points, or 0.3 percent.
