The March employment report was reasonably solid and provided a sigh of relief after February’s exceptionally weak report. The economy created +196k jobs, above expectations of around +170k, and much better than February’s mere +33k. Both the unemployment rate and underemployment rate remained at very low levels of 3.8% and 7.3%, respectively, and job gains were mostly widespread. Despite these positive signs there were some nagging details. A rebound had been expected in manufacturing, but instead it lost -6k jobs, the worst performance in 32 months. Wage gains were weak and drove the y/y rate from +3.4% to +3.2%. February job creation was revised up from +20k to +33k, but that still left it at an exceptionally low level. Finally, the labor force shrank for the third consecutive month, driving the participation rate down from 63.2% to 63.0%. Despite these irritating details, the bottom line is that the headline numbers are strong, and the report gives some reassurance after last month’s report and recent disappointments in retails sales, durable goods, and services ISM.
