Payroll gains were ahead of expectations for March as employers added 215,000 employees. Ahead of the report market forecasters surveyed by Bloomberg estimated a monthly gain of 205,000. The unemployment rate advanced by one-tenth to 5.0% as more people were drawn to the labor force. The participation rate rose to 63.0%. The pace of wage increases also provided a crumb of comfort. The March reading marks a slowing in the pace of job creation from the prior month’s pace of 245,000 new jobs. According to the BLS, construction companies added 37,000 new jobs and the most jobs in three months. During the past year the sector has attracted 301,000 workers.
The report is not strong enough to explicitly state that the Fed will tighten by the time of the June meeting. But employment gains remain above the 200,000 threshold, and the report might have been stronger were it not for a 29,000 loss of workers in the manufacturing sector. The BLS noted that most of the losses occurred in the durable goods industries, where machinery (-7,000), primary metals (-3,000) and semiconductors and electrical components (-3,000) each suffered a drain. And while the FOMC might dwell further on the perils of the manufacturing sector dogged by a stronger dollar, there is potentially better news on the horizon.
Overnight, the latest Chinese manufacturing gauge surprised to the upside, while Ms. Yellen’s commentary earlier this week has further dampened the languishing attitude towards the dollar. Later on Friday investors will closely watch the latest ISM manufacturing survey, and in particular the employment component. That measure has faced less contraction recently, although jives with the latest estimate of lost jobs, having been in expansion territory only once in the past five months. Should the employment component rebound in that report, the loss of manufacturing jobs in the establishment survey might quickly lose its gravity.
Employment report marred by job losses amongst manufacturers
April 1, 2016 08:50 AM

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