The March Jobs Report Misses Expectations

Three takeaways from the Labor Department’s snapshot of the economy

Payless Shoesource, which recently announced that it would be closing 400 stores across the country.
Carlo Allegri / Reuters

On Friday, the Labor Department reported that 98,000 jobs were added to the U.S. economy in March, while the unemployment rate fell to 4.5 percent. The report missed expectations: Economists surveyed by The Wall Street Journal were expecting 175,000 jobs to be added. Here are the three most important takeaways.

  1. The weather may have played a role in the low numbers.

Well before the jobs report landed on Friday, analysts and economists were talking about the weather. Last month saw a snowstorm in the Northeast and Midwest during the week that the BLS does its survey, and snowstorms can keep people away from work, particularly in the construction sector. Economists at Goldman Sachs warned that the jobs data for March could be soft due to the weather factor. Conversely, unseasonably warm weather might have boosted the numbers for February.

On the other hand, the March jobs report saw big losses in the retail sector, which wouldn’t be largely weather-related. Retail bankruptcies are on their way to a post-recession high, with 9 retailers already filing for Chapter 11 in 2017, and several department stores have announced store closings as part of downsizing. BLS reported that employment in retail was down 30,000 jobs. With Payless ShoeSource closing some 400 stores in the country for April, the “retailpocolypse” might show up again next month.

  1. The report was a mixed bag.

This jobs report brings good news and not-so-great news: The unemployment rate is down at 4.5 percent, the lowest level in almost a decade. But the number of jobs added in January and February were revised down; combined, the employment gains for those two months are 38,000 less than previously reported.

But there’s a lot of good news, too. The paychecks of American workers have been slowly but steadily growing: Average hourly earnings are up to $26.14—which brings the overall wage growth in the past 12 months to 2.7 percent. The much-watched labor-force participation rate seems to be steady.

One of the best pieces of news in the March jobs report is the U-6 rate. While the unemployment rate measures the number of unemployed Americans actively looking for work, the U-6 is considered a broader measure because it includes discouraged workers as well as part-time workers who want full-time jobs. Economists consider the U-6 a better picture of a labor market’s health, and the U-6, at 8.9 percent in March, is the lowest reading since the Great Recession.

That has many analysts concluding that the U.S. labor market is still seeing steady strengthening, though the pace might be slowing down.

  1. Trump’s in a tough spot.

Once again, many are eagerly awaiting how President Donald Trump will characterize the jobs report. Yesterday, President Trump tweeted,

After a strong reading last month, Sean Spicer said at a press conference that the BLS numbers “may have been phony in the past, but it’s very real now,” signaling a change in tone from Trump’s presidential campaign, during which he called the Labor Department’s numbers  “phony” and “total fiction.” But last month saw high readings, whereas the topline number for the March jobs report missed expectations. Some analysts say that President Trump should be happy with the March jobs report, because the sectors he’s expressed interest in—manufacturing and mining—have been gaining since he took office. But the Trump administration might wave away the numbers the way it reversed course when the stock market slumped.