March hiring disappointed, with just 126,000 new jobs reported by the government Friday, prompting concerns that the economy may be softening amid slowing exports and oil field turmoil.
Most mainstream forecasters had expected hiring north of 200,000, where it’s averaged for more than a year. Instead, March was a large miss, although the unemployment rate held steady at 5.5 percent.
A combined reduction Friday of 69,000 jobs for the hiring estimates in January and February suggests that employment was already decelerating.
“March was a tough month for the job market,” said Mark Zandi, chief economist for forecaster Moody’s Analytics. “Job growth during the month was disappointing, as was the downward revisions to gains in previous months.”
The report from the Labor Department dashed a long positive streak, and combined with the revisions for January and February, the new three-month average for hiring fell below the 200,000 threshold for healthy hiring, to 197,000.
The rest of the year looks brighter, Zandi said, and it should offset a slow start for the economy this year.
“The soft job report significantly overstates the slowdown in job growth. Underlying job growth remains near 250,000 per month,” Zandi said. “This will become evident this spring, when more seasonable weather returns and the decline in oil prices turns into a positive for consumer spending and jobs.”
Weather held back hiring in the construction sector, which lost 1,000 jobs in March. A strengthening dollar weighed on manufacturers as exports softened. That sector lost also 1,000 jobs last month.
The mining sector lost 11,000 jobs in March, reflecting layoffs in the oil fields and related businesses due to sagging energy prices. While that was bad news for employment in the energy sector, it likely boosted employment in the retail sector, as Americans have more money in their wallets and are willing to spend more. Retailers added 26,000 jobs in March.
Similarly, the leisure and hospitality sector added 13,000 jobs. It suggests that Americans are opening their wallets, and the sector should do even better later in the year if gasoline prices remain low.
The weak March report is a reminder that although the economy is improving, it’s still struggling to climb back from the Great Recession.
“While it’s important not to put too much stock in a couple months of data . . . policymakers should be wary of any signs of any slowdown from the solid job growth over the previous year,” Elise Gould, an economist with the liberal Economic Policy Institute, wrote in an analysis. “Other indicators make it clear that there is still ample slack in the labor market.”
That slack has held wages down, as workers can’t demand higher pay. Private-sector hourly wages are up only 2.1 percent over the past 12 months, but they rose by 0.3 percent in March, a positive indicator if maintained in coming months.
Hourly earnings should also improve, as large employers such as Wal-Mart, Target and McDonald’s have recently announced wage hikes for their lowest-paid employees.
With an election season approaching, Republicans wasted little time Friday pouncing on the weak March numbers.
“Economic growth is uneven at best, and the number of Americans in the labor market is hovering near 30-year lows,” House Speaker John Boehner, R-Ohio, said in a statement minutes after the jobs report was released.
The White House did its best to put a positive face on the numbers. The head of the Council of Economic Advisers, Jason Furman, cited rising earnings and a stable unemployment rate, suggesting in his blog that outside factors weighed heavily on March hiring.
“A range of factors including the weather and the global economic slowdown have affected economic data for the first quarter,” Furman said.