US economy grew by only 98,000 jobs in March; unemployment rate is at 4.5%

Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this marks the weakest showing for the economy in nearly a year.
Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this marks the weakest showing for the economy in nearly a year. PHOTO: AFP/GETTY IMAGES

NEW YORK (NYTIMES) - The US Labor Department released hiring and unemployment figures for March. It is the latest official snapshot of the state of the American economy.

The Numbers

• 98,000 jobs were added last month. Economists had been anticipating a gain of about 180,000 jobs for the month.

• The unemployment rate was 4.5 per cent, down from 4.7 per cent in February.

• The average hourly wage grew by 0.2 per cent.

The Takeaway

Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this marks the weakest showing for the economy in nearly a year. Although it represents just one month's data, it will raise questions about whether improving business sentiment is actually translating into any meaningful action by employers.

If the anemic hiring persists, the Federal Reserve may be forced to reconsider its plan to raise interest rates twice more this year.

The Background

The robust numbers in January and February led some analysts to conclude that the economy was benefiting from a "Trump bump" after President Trump's election, but hard data to support that argument has been scarce.

A month ago, Sean Spicer, the White House press secretary, claimed credit for the increased job creation on Mr. Trump's behalf, saying it was a result of "the surge in economic confidence and optimism that has been inspired since his election."

The latest report could help answer the question of whether so-called soft data, like stronger sentiment among businesses, was actually prompting companies to hire more workers.

In recent months, blue-collar fields like manufacturing and construction have been very solid, a sharp contrast with late last year when service industries like education, business services and health led the way.

Manufacturing accounts for only 9 per cent of employment but punches above its weight, because factory jobs pay considerably more than many service positions. Gains in this sector also help Mr. Trump with his base, which liked his promises to erect trade barriers and promote blue-collar jobs.

But for the moment, improving economies overseas, and the fading effects of the strong dollar, have much more to with the manufacturing sector's revival than policies in Washington.

"We were set up to do better this year," said Diane Swonk, a veteran independent economist in Chicago. "The sectors that got hit the hardest in the past, like manufacturing and mining, have been doing better."

Although the proportion of Americans not in the work force remains near multidecade lows, the fall in the unemployment rate and the steady hiring in recent months are translating into raises for most workers.

The tighter labour market is prompting employers to pay more to attract and retain workers, said Amy Glaser, senior vice president at Adecco USA, a leading staffing firm.

"In business reviews, the No. 1 question is whether employers are competitive as workers become more scarce," Ms. Glaser said.

She added that her firm was also seeing more companies hire new employees directly, rather than first having them work in a temporary position, or what she terms "try before you buy."

"Employers are also converting temp workers to permanent earlier than usual," Ms. Glaser said. "We're seeing an uptick across the board."