March Payroll Growth Keeps Unemployment in Check

by: The Fundamental Analyst

Non-farm payrolls rose a seasonally adjusted 216,000 in March according to the BLS, revisions to prior months were negligible. The latest month is the largest gain in payroll employment since May 2010.

The Household survey showed employment growth of 291k in March. Taken together with a steady participation rate at 64.2% resulted in the unemployment rate falling slightly to 8.8% .

38 months past the prior peak in employment and the labor market has only recovered 17% of the jobs lost during the great recession.

Hourly earnings were disappointing once again, basically flat over the last month and are up less than 0.4% over the last 5 months. Year over year hourly earnings are up just 2.0% which would be fine if your cost of living reflected the CPI, but in the real world a lot of wage earners cost of living has increased substantially more given the rise in food and fuel prices.

Whilst the number of unemployed has been falling, the average length of unemployment continues to make new records. That is borne out by the fact that those unemployed for 6 months or more make up more than 45% of the total number of unemployed. To put that into perspective, the previous peak was only 26% after the severe recession of the early 1980′s.

In summary, March payroll growth was reasonably strong and if it can be sustained ( a big if) will keep the unemployment rate ticking down modestly. Hours worked and hourly wages are a concern and the picture for the long term unemployed is still ugly.