Backsliding Into April: March Employment Figures Regress
So there were only 126,000 new jobs created last month, or about half (to put it generously) of what we'd all been expecting. To make things just a little bleaker, numbers for the preceding two months were also revised downwards, by 38,000 for January and by 31,000 for February. After lots of incremental steps forward, then, the employment numbers for March 2015 represent the proverbial "two steps back" from the slow-but-steady progress of prior months.
Based on recent instability in the stock market, and a general feeling of insecurity on economic fronts of all kinds, I can't say I'm stunned. The March new jobs number reflects a level that goes all the way back to 2013, according to some news reports on those figures (see this Reuters story for more discussion, and also this NPR item). Prior to March 2015, however, the economy had been on something of a job growth tear, "maintaining a level of job creation that hasn't been seen since a 13-month run back in 1994-95" (NPR story).
All that said, unemployment remains unchanged at 5.5 percent, with labor force participation likewise stable at 62.7 percent. According to the latest BLS report that rate has "remained within a narrow range of 62.7 to 62.9 percent" since April 2014, one year ago this week. Looking for such rays of sunshine as may be available, the average hourly earnings rose by 7 cents to $24.86, with ongoing employment increases in professional and business services (+40K), health care (+22K), and retail (+26K) leading the way to the lower-than-expected figures reported this morning.
A key decline showed up in the mining industry, which saw employment fall off by 11,000 jobs, while food services posted an anemic jump of just 9,000 new jobs for March, after adding a far more compelling 66,000 new jobs in February. All the other sectors were basically unchanged: construction, manufacturing, wholesale trade, transportation and warehousing, information, financial services, and government.
Turning to the information sector, unemployment has dropped to an interestingly low level of only 3.0 percent with 84,000 unemployed out of a total sector size of 2.8 million jobs. This is at or below the full employment level, so I would expect this to mean that businesses and organizations won't be able to sidestep or avoid adding new IT headcount for much longer this year.
Given that last year's corresponding numbers were 5.1 percent and 161,000 unemployed (total sector size: 3.16 million jobs) this shows shrinkage in overall IT employment over the last year. That's somewhat inconsistent with other reports on job growth, and surveys of IT hiring managers, especially as regards their plans for further IT hiring in 2015.
Despite that discrepancy, I take heart from the extremely low level of unemployment in IT. I'm willing go out on a limb far enough to stand by my earlier assertion that this can't help but lead to increases in IT headcount. (It may also help explain continuing vigorous growth in professional and business services, as unemployed IT Professionals strike out on their own or go to work for contract service delivery firms).
It's by no means clear if these reduced numbers point to a new status quo, or if they're simply a hiccup in the old status quo. That's what will make next month's numbers uncommonly interesting, as will be the markets' reaction to this month's numbers, when they reopen on Monday following the holiday weekend.
Though Asian markets are up today (Shanghai +1.0 percent, Hang Seng + 0.76percent and Nikkei +0.63 percent), I'll be very surprised if US and European markets bounce upward to follow suit when the weekend is over. We'll see! One thing's is for sure, though: The employment situation just got a whole lot more interesting thanks to this latest report.