Employment: Job Growth Slows, Wages Still Growing

Bottom Line: Nonfarm payrolls rose as expected in March, up 236k, the slowest gains in over two years.  Private sector job gains were particularly slow as government hiring jumped. Construction and manufacturing shed jobs, as did retail trade. Jobs in education and health services continued to grow but slowed significantly from the average pace of the last year.Average hourly earnings rose 0.27%, just a touch faster than the prior month but still decelerating slowly on a trend basis. After running at an annualized pace of well over 5% in 2021 and over 4% in 2021, the trend rate of gains looks to be settling into the 3 - 3.5% area, slower but still more robust than the pre-pandemic trend rate.Finally, the household survey showed sharply stronger job gains, rebounding to 577k in March from just 177k in February. With the labor force participation rate edging just a touch higher, the unemployment rate dropped a tenth to 6.7%.Overall, looking through the volatility, the labor market remains robust but is cooling slowly.The Unemployment Rate FELL by 0.1 percentage points in March to 3.5%, compared with market expectations for a no change to 3.6%.  Household employment rose by 577k while the labor force increased by 480k, resulting in a decrease in the number of unemployed of 97k.

The Labor Force Participation Rate ROSE by 0.1 percentage points to 62.6%. The Employment-Population Ratio ROSE by  0.2 percentage points to 60.4%. The number of people Working Part-Time for Economic Reasons ROSE by 73k to 4,037k. while Long-Term Unemployment ROSE by 47k to 1,104k (accounting for 18.9% of the unemployed),  while the Mean Duration of Unemployment ROSE by 0.2 weeks to 19.5 weeks. There are now 5.8 million people officially unemployed. In addition, there are another 4,925k people who say they want a job but are not currently looking for one.  Finally, another 4,037k people are working part-time because of slack economic conditions.The Index of Aggregate Hours FELL by 0.1%, combining the moderate gain in private payroll employment and the shorter workweek.Hourly Earnings ROSE by 0.3% in March, below market expectations of 0.3%. Hourly earnings are now 4.2% ABOVE their year-ago level. Weekly Earnings  FELL by 0.0%, the result of the change in hourly earnings and a shorter workweek. Weekly earnings are now 3.3% ABOVE their year-ago level. The Average Workweek FELL by 0.1 to 34.4 hours, BELOW the market consensus at 34.5 hours.