Hiring Plunges to 20,000 as Wage Gains Top Estimates
U.S. hiring was the weakest in more than a year while wage gains were the fastest of the expansion and the unemployment rate fell, a possible sign that America’s jobs engine is starting to slow down. Treasuries rose while the dollar and stock futures fell.
Nonfarm payrolls increased by 20,000 after an upwardly revised 311,000 gain the prior month, a Labor Department report showed March 8. The median estimate in a Bloomberg survey called for an increase of 180,000. Average hourly earnings rose a better-than- projected 3.4% from a year earlier, while the jobless rate declined to 3.8%, near a five-decade low.
Even with faster pay raises that could reflect employers’ difficulty finding qualified workers, the big miss on payrolls may fuel concern about the mood among U.S. consumers after a December retail-sales slump that was the worst in nine years. Economists project the expansion will slow this year, amid weaker global growth and the fading impact of fiscal stimulus such as President Donald Trump’s tax cuts.
At the same time, policymakers and economists might wait for several months of weak hiring before concluding there’s cause for concern in the labor market. Some of the weakness could be chalked up to aftereffects of the government shutdown or to winter weather, as construction jobs fell by 31,000, though many other sectors were soft including education and health services as well as leisure and hospitality.
“There’s no reason to panic,” Ryan Sweet, head of monetary policy research at Moody’s Analytics Inc. “You average the couple months together, and the jobs market is still doing well. Job growth will slow this year as the economy begins to moderate. But 20,000 jobs is not what we’re going to be creating month-in and month-out.”
Federal Reserve policymakers have indicated this year they won’t raise interest rates again until seeing inflation advance. Fed Chairman Jerome Powell said in congressional testimony last week that “the job market remains strong.’’
