March U.S. Employment Report: Good News and Bad News

What the latest jobs number confer with one hand, they take away with another. Thus, while unemployment declined to a nicely low 4.5 percent for March, the overall jobs added number comes in at a pretty paltry 98,000 for that month.

At the same time, numbers for January and February were each also revised downwards, with January down from 238,000 to 216,000, and February from 235,000 to 219,000, for a net loss of 38,000 across both months. The three-month average comes in at 178,000 per month, another less-than-stellar number.

While we're getting close to historically low unemployment rates, however, we won't stay there for long with monthly growth rates of fewer than 100,000 new jobs. Wages increased only slightly ($0.05 to $26.14 for average hourly earnings on all employees listed on nonfarm payrolls), while the average workweek dropped 0.2 hours to 40.6 hours, with average overtime down by 0.1 hours to 3.2 hours.

Does this portend a softening of, or slowdown for, the U.S. economy? It's hard to say, but it is fair to observe that the long cadence of two steps forward followed by one step back that has characterized the our long, slow and difficult climb out of the recession of 2009-2010 looks pretty likely to continue.

We'll have to see whether "the Donald" can shake things up sufficiently to knock job growth out of this now-customary rhythm.

Looking at the Information sector in Table A-14 of the latest job report, there is a small ray of sunshine for those at home in IT. In March 2016, the unemployment total for the sector was 124,000 jobs for a net unemployment rate of 4.4 percent. One year later, those numbers were 108,000 jobs and 4.0 percent respectively.

While the downward trend in the Information unemployment rate is good news, sector size comes in at 2.8 million for March 2016, and 2.7 million for March 2017. That indicates a net loss of 100K jobs in the overall sector, while total unemployment has dipped by only 16,000.

Thus, what was written large in the overall numbers for the entire economy in the "good news/bad news" elements I used in this blog post's title is also writ small in the Information sector itself.

Looking at the past two calendar years (from March 2015 to March 2017), it's not hard to see monthly job growth as an ongoing, up-and-down sequence:

Source: U.S. Bureau of Labor Statistics March 2017 Employment Situation Summary (PDF version)

Interestingly, our three month trailing average of 178,000 jobs added per month falls a bit short the two-year average that's right around 200,000. Could this portend a downward turn for job growth? While that's a distinct possibility, I sure hope that this doesn't turn out to be what actually happens. Stay tuned!