U.S. technically enjoying full employment; but job creation is slowing down

Andrew Cummings
April 9, 2017

Overall nonfarm payrolls rose by 98,000 jobs, the slowest pace in almost a year, though the unemployment rate dropped to 4.5%, its lowest since May of 2007, the U.S. Bureau of Labor Statistics reported Friday.

United States employment gains slowed in March but the jobless rate unexpectedly dropped to the lowest in nearly a decade, suggesting the labour market is returning to a more sustainable pace of progress. In March, sectors that fared well included business and professional services, mining, and health care services. There were 28,000 new manufacturing jobs in February, President Donald Trump's first full month in office, and March is expected to show more gains. Most important, it did so without a decline in the share of Americans working or looking for work, known as labor force participation rate, which stayed the same.

With a major decline in unemployment claims filed in early April, these metrics seem to be a sign of a tighter labor market: one in which many qualified people who want to work are actually able to find one.

There was some mildly good news for wages: they increased by 5 cents in March after rising 7 cents in February, coming to an annual growth rate of 2.7 percent. Many analysts expect that trend ultimately to result in average monthly job gains of about 170,000 this year, down from 187,000 last year and 226,000 in 2015. With 30,000 jobs lost in March, the sector has seen 89,000 jobs eliminated since last October. On the other hand, retail payrolls fell 29,700, dropping for the second month in a row. The temporary agency penetration rate inched up to 2.054%, an all-time high.

The number of jobs created in February was revised down from 235,000 to 219,000, while the figure for January was revised down from 238,000 to 216,000.

The report showed that large numbers of teenagers, women and Latinos found jobs last month. The unemployment rate for teens dropped to 13.7 percent from 15 percent. On average, Canadian earners saw their pay increase 1.1 per cent over the previous year - a period during which consumer prices climbed by about two per cent.

What's more, for the first time in years, overseas growth stands to boost the USA economy. Bloomberg said the fact that the jobless rate fell even as job creation did suggests that the market is returning to more normal conditions. Overall, the US added 98,000 jobs in March compared with a revised 219,000-job gain the previous month.

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