The U. S. Labor Department threw a real curve ball out at the economic expansion on this first week of the 2017 baseball season. On point, after a strong report on private sector job growth issued on Wednesday morning by Automatic Data Processing (ADP), in which that services provider reported that its survey had shown a much better-than-forecast increase in private sector payrolls in March, with a stunning gain of 285,000 jobs, there had been some pundits who naturally sensed that the gain in the just-issued Labor Department release would easily surpass the 180,000 positions expected. However, that was not the case.
Specifically, the March report from the U.S. Government showed that just 98,000 new jobs were added last month. Worse, initially estimated payroll gains for January and February were revised modestly lower. Thus, the estimated January increase was pared from 238,000 to 216,000 and the February rise was reduced from 235,000 to 219,000. As to the latest survey, the big swing factor was a sharp drop in retailing positions for the month. Conversely, jobs in professional and business services, in mining, and in health care all rose. But the cumulative effect was a weak report.
In other data within this broad issuance, we saw that the unemployment rate ticked lower, falling from 4.7% to 4.5%. But that bit of good news likely reflected the fact that fewer discouraged Americans, already out of work, were activity looking for employment. If one leaves the labor force by not actively looking, he or she is then no longer considered unemployed. Also, average hourly earnings ticked up by five cents in March; the increase in February had been seven cents. Finally, the labor force participation rate, up modestly in February, stayed unchanged at 63.0% in March.
All in all, this was a disappointing report, and the U.S. equity futures, already a little weaker on the news that the United States had launched air strikes on Syria, fell somewhat further following the employment survey's release.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.