The U.S. labor market only added 103,000 positions in March as the nation’s jobless rate held steady at 4.1% for the last three months of 2017 and the first quarter of 2018, according to the monthly employment picture released Friday (April 6) by the U.S. Bureau of Labor Statistics (BEA).
The March unemployment report is a huge drop from the 313,000 and 200,000 nonfarm jobs added to U.S. payrolls in January and February, respectively, and well below Wall Street expectations. A consensus of economists across the country had forecasted a total of 178,000 jobs would be added to the nation’s economy in the first quarter.
And just as Arkansas’ employers are having difficulty filling key positions for highly skilled laborers and professionals in all job sectors, many workforce experts are concerned the U.S. economy could suffer productivity losses as industry leaders cut back on hiring.
On Thursday, Little Rock startup BankLabs announced it had plans to hire 19 highly skilled technology-focus professionals to expand its cloud-based “fintech” business in central Arkansas. However, company president Matt Johnner said the company has had some difficulty in finding tech-savvy new hires in the tight Arkansas job market.
RIP-ROARING LABOR MARKET
“For job hoppers and job seekers — and those entering the labor force for the first time or coming back after an extended period — the jobs are out there,” said Dwight Johnston, chief economist for the California Credit Union League. “The key is to continually stay certified, don’t stop completing new training courses, and engage in skills development. Don’t just drift back into the labor force without updating your skills, no matter how small it may be. This is an economy where it’s a great time to jump into the workforce if you have the right skills in place.”
Despite the March swoon, the closely-watched ADP noted earlier this week private sector employment increased by 241,000 jobs from February to March, allowing the U.S. labor market to close out the first quarter with a robust average monthly job growth of more than 200,000.
“We saw impressive momentum in the first quarter of 2018 with more jobs added per month on average than in 2017,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Mid-sized businesses added nearly half of all jobs this month, the best growth this segment has seen since the fall of 2014. The manufacturing industry also performed well, with its strongest increase in more than three years.”
Mark Zandi, chief economist of Moody’s Analytics, added: “The job market is rip-roaring. Monthly job growth remains firmly over 200,000, double the pace of labor force growth. The tight labor market continues to tighten.”
Two weeks ago, the state Department of Workforce Services reported Arkansas’ seasonally adjusted unemployment rate edged up to 3.8% as the state’s civilian labor force declined 1,521 between months, a result of 1,879 fewer employed and 358 more unemployed Arkansans.
Nationwide, the number of unemployed persons was little changed at 6.6 million workers. Among the major worker groups, the unemployment rates for all major categories had held steady in March from the previous months. Among key categories, the jobless rate was at 3.7% for adult men and women, while teenagers held in double-digits at 13.5%. Unemployment rates for races remained below 7% with Blacks on the highest rung at 6.9% and Asians at the lowest at 3.1%.
Meanwhile, the number of long-term unemployed, or those jobless for 27 weeks or more, was little changed at 1.3 million in March and accounted for 20.3% of the unemployed. The labor force participation rate was 62.9 in March and the employment-population ratio held at 60.4%
The number of persons employed part time for economic reasons was essentially unchanged at 5 million in March. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.
There were 1.5 million persons marginally attached to the labor force in March, hardly changed from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached in March, there were 45,000 discouraged workers, or those persons not currently looking for work because they believe no jobs are available for them. The remaining 1 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.
The so-called “U-6” jobless rate, which includes those “marginally” attached to the labor force and person employed part-time but seek full-time work, was 8%, down from 8.2% in March and well below year ago levels at 8.9%. Some economists point to the U-6 number as a better and broader measure of the economy with respect to jobs.
SOME SECTORS STILL GROWING
Among the 103,000 job additions in March, the surprising manufacturing sector grew by 22,000 month-to-month, with most of the increase from the durable goods sector. The robust health care sector also added 22,000 jobs in March, consistent with the average monthly gains over the previous 12 month-period.
Employment in other mining, which includes the oil and gas sector, increased by 9,000 at the end of the first quarter. Mining employment has risen by 78,000 since a recent low in October 2016. Employment in professional and business services also continued to trend up in March with 33,000 jobs. This category, which includes high-paying startup jobs, has risen by 502,000 over the year.
The retail trade employment lost ground in March by 4,000 after increasing by 47,000 in February. In March, employment declined by 13,000 in general merchandise stores, offsetting a gain of the same size in February. Over the year, employment in retail trade has shown little net change.
Employment in construction also fell by 15,000 month-to-month, following a large gain in February of 65,000 new positions. Employment changed little over the month in other major industries, including the wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality and government.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in March. In manufacturing, the workweek edged down by 0.1 hour to 40.9 hours; overtime edged down by 0.1 hour to 3.6 hours.
Average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $26.82. Over the year, average hourly earnings have increased by 71 cents, or 2.7%. Average hourly earnings for private-sector production and nonsupervisory employees increased by 4 cents to $22.42 in March.
The change in total nonfarm payroll employment for November was revised downward from 252,000 to 216,000, and the change for December was revised up from 148,000 to 160,000. Those revisions in November and December combined were 24,000 less than previously reported.