Weekly Economic Trends and Indicators

According to the Bureau of Labor Statistics (BLS), the U.S. economy added 228,000 jobs in March, which was well above expectations of about 140,000. The unemployment rate increased slightly from 4.1% to 4.2%. The rise in the unemployment rate was mostly due to new entrants into the labor force. Average hourly earnings increased by 0.3% to $36.00/hour and the average workweek was unchanged at 34.2 hours.

Nonfarm payroll employment was revised downward for January and February by a combined 48,000 jobs.

The Details:

Private service providing jobs made up the bulk of the new jobs last month with 197,000 net new jobs created. Health care was, as in previous months, the largest contributor to that total with 53,600 net new jobs. Some of the other sectors experiencing strong gains were trade, transportation and utilities (48,000), leisure and hospitality (43,000), and social assistance (24,200).

Two areas employing significant numbers of workers but showing essentially flat growth last month were professional and business services (3,000 net new jobs) and manufacturing (1,000 net new jobs). Employment nationwide in both sectors has been mostly flat for the last year.

Government (all levels combined) added 19,000 net new jobs in March. Federal government employment was little changed, only down by 4,000. Job losses in the federal government are expected to increase over time as recently announced cuts begin to take effect. State and local government education (combined) made up the majority of the gains in government jobs (13,700).

The Context:

For the most part this was an excellent report, although the relative weakness in manufacturing and business and professional services continues to show the economic headwinds faced by those two sectors. However, labor reports are backward looking and tend to lag behind the turning points in economic activity. Today’s good news on the labor front was overshadowed by the negative news on tariffs which were announced by President Trump on Wednesday and roiled the markets for the remainder of the week.

If there is a silver lining to the mostly cloudy news, it would have to be that today’s employment report shows that at least in the days leading up to the tariff announcement, the expectations of coming tariffs had not yet cooled labor market activity. That is likely to change going forward as the tariffs announced on Wednesday were considerably larger than nearly everyone in the market expected. We will address the relation between tariffs and the economic outlook in more detail next week and in the Chamber’s Quarterly Market Report next month.

Next week: National economic conditions