The U.S. adds 196,000 jobs, beats expectations

The U.S. added a cool 196,000 jobs in March.

Wall Street economists were expecting the U.S. economy to have added 175,000 non-farm payrolls in March, according to data compiled by Bloomberg.

February’s sharply lower-than-expected 20,000 job additions were revised 33,000.

The unemployment rate 3.8%, the same pace of increase as in February, according to consensus economists polled by Bloomberg.

The labor force participation rate 63.0%. On average, economists were expecting to see the labor force participation rate remain unchanged, at a five-and-a-half year high of 63.2%.

Average hourly earnings grew 3.2% year-over-year, below estimates for 3.4% growth. Month-over-month, average hourly earnings grew 0.1%, below the 0.4% increase seen in February. 

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“Really it looks like an anomaly,” Joshua Wright, chief economist for iCIMS, said in an interview with Yahoo Finance about February’s reading. His firm’s model estimates that the economy added 160,000 non-farm payrolls in March.

The fluctuations in the headline payrolls figures over the past several months lend additional weight to March’s results, as market participants seek an emerging trend to help smooth out the volatility.

Nevertheless, the current three-month trend in non-farm payroll additions stands at a still-healthy 186,000. That’s thanks to much higher job creation in January and December.

“One of the things that’s been most remarkable over the last 10 years has been just how steady the labor market expansion has been,” Wright said. Following February’s results, the U.S. economy added new jobs for its 101st consecutive month.

“Normally when you have an expansion go on this long, job growth dips into negative territory every now and then,” he said.

Many economists noted that exogenous factors – including weather effects from a colder-than-average February and lingering impact from the beginning of the year’s protracted partial government shutdown – likely played a role in influencing the past several jobs reports.

Marvin Loh, global macro strategist at State Street, noted that the March jobs report will be “the first clean one in a while” as residual impact from the government shutdown wanes.

“Hopefully we’ll get something that we can dissect a little bit more accurately than the last couple of months,” Loh said in an interview with Yahoo Finance. 

Friday’s jobs report follows ADP/Moody’s results on private payrolls, which were released earlier this week. That data revealed a gain of 129,000 new positions in March. This came in below estimates of 175,000 — although February’s reading was upwardly revised by 14,000 to 197,000.

While many economists point out that ADP/Moody’s report has historically been an imperfect indicator of the BLS’s results, others acknowledge that it helps counterbalance noise in the “official” establishment survey.

“The upward revision to ADP’s February estimate suggest that ADP’s data show a notably different pattern relative to the numbers from the BLS and that ADP expects February’s BLS numbers to be revised up on Friday,” Nomura economist Lewis Alexander wrote in a note.

“In that sense, it is possible that the BLS March employment report will show a weaker-than-expected March employment gain but with strong upward revisions to February,” he added.

This story is developing. Please check back for updates.

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