The economy continued to add jobs, but the growth was at its slowest pace in more than a year, while lay-offs saw unexpectedly good news, and personal incomes and spending saw modest gains.
The U.S. economy added just 126,000 jobs in March, which, while an increase, was the slowest pace of job growth since December 2013. This kept the unemployment rate at 5.5 percent, unchanged from last month, according to figures released by the Department of Labor last week.
Overall, the number of unemployed Americans saw little change, hovering at 8.6 million people, with the labor force participation rate — the percentage of employable Americans actively working or looking for work — also hovering at 62.7 percent. The number of long-term unemployed people saw little change at 2.6 million people, which represented 29.8 percent of overall unemployment.
The number of Americans involuntarily employed on part-time basis, for economic reasons such as their hours work cut back or that was the only work they could find, totaled 6.7 million, which was the essentially the same as February.
Analysts cautioned not to read too much into the March numbers, as one month’s performance does not represent a trend in terms of any employment slow-down.
“Payrolls are always volatile even at the best of times, and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer,” Capital Economics economist Paul Ashworth wrote in a statement to clients. “… this is most probably another temporary blip.”
Initial Jobless Claims
Lay-offs beat market expectations for an increase, and instead saw a healthy decline, with continuing jobless claims hitting a 15-year low. Initial jobless claims filed during the week ending March 28 fell to 268,000, a drop of 20,000 from the preceding week’s revised level of 288,000, the Employment and Training Administration reported last week. The performance completely reversed market expectations of a rise in jobless claims to 295,000.
The four-week moving average, considered a more reliable gauge of jobless claims, also saw a significant drop, falling to 285,500, a decline of 14,750 claims from the prior week’s revised average of 300,250.
Better yet, the number of unemployed Americans still covered by unemployment insurance fell to 2,325,000 people, a drop of 88,000 from the previous week’s revised level of 2,322,000. That’s the lowest continuing jobless claims have been since Dec. 16, 2000.
“The trend in claims, now below the pre-recession trough, continues to impress and remains consistent with an improving labor market,” BNP Paribas analyst Derek Lindsey stated in a note to clients.
Incomes and Spending
Continued bad weather had an impact on consumer incomes and spending in February. Personal incomes for the month grew by $58.6 billion, or 0.4 percent, and disposable personal income (DPI; income after taxes) notched p $54.2 billion, or 0.4 percent, the Bureau of Economic Analysis reported last week. Meanwhile, personal consumption expenditures (PCE) notched up $11.8 billion, or 0.1 percent.
Personal savings — which is DPI minus personal outlays — hit $768.6 billion in February, compared with $728.7 billion in January. The personal savings rate — which is personal savings expressed as a percentage of DPI — grew to 5.8 percent in February, compared with 5.5 percent in January.
“It does look like weather might have been a disruption in the first quarter, just like we thought a year ago,” BNP Paribas economist Laura Rosner told the Wall Street Journal. “The question now is, is this going to persist or is it something that’s going to get reversed?”
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