No Spring Break for Hiring: April 1 – 5

Job creation remained strong in March. Here are the five things we learned from U.S. economic data released during the week ending April 5.

Payrolls further swelled in March. Nonfarm employers added a seasonally adjusted 303,000 workers to their payrolls, following gains of 256,000 and 270,000 in January and February. The Bureau of Labor Statistics measure has grown for 39 consecutive months. The private sector added 232,000 workers, including 190,000 in the service sector. Industries seeing the largest payroll gains were health care/social assistance (+81,300), leisure/hospitality (+49,000), and construction (+39,000). Average weekly earnings of $1,193.34 was up 4.1 percent from a year earlier.

Based on a separate survey of households, the unemployment rate slipped 1/10^th of a percentage point to 3.8 percent. 469,000 people entered the labor force, pushing up the labor force participation rate to 62.7 percent. The 25 to 54 labor force participation rate slipped 1/10^th of a percentage point to a near-record 83.4 percent. The typical length of unemployment increased 2/10^ths of a week to 9.5 weeks, while the count of part-time workers seeking a full-time opportunity narrowed by 68,000 to 4.308 million. The broadest measure of labor underutilization—the U-6 series—held steady at 7.3 percent.

Hiring picked up even as jobs remained unfilled in February. The Bureau of Labor Statistics reports that there were a seasonally adjusted 8.756 million unfilled jobs at the end of the month, essentially unchanged from January and down 11.1 percent from a year earlier. The private sector had 7.855 million open jobs, including a million-plus unfilled positions in health care/social assistance, professional/business services, and leisure/hospitality. Employers hired 5.818 million workers, up 120,000 from January but off 4.0 percent from February 2023. Professional/business services and leisure/hospitality employers both added more than a million workers. 5.559 million people separated from their jobs, up 110,000 from January but down 4.7 percent from a year earlier. This included 3.484 million quitting their jobs (up 38,000 for the month and down 12.1 percent from a year earlier) and 1.724 million layoffs (up 128,000 for the month and 9.7 percent from February 2023).

Manufacturing activity grew in March. The Institute for Supply Management’s Manufacturing PMI jumped 2.5 points to 50.3. This was the first time in 16 months that the PMI was above 50.0, indicative of an expanding manufacturing sector. Rising were measures for new orders (51.4), production (54.6), employment (47.5), and inventories (48.2). Nine of 18 tracked manufacturing sectors expanding in March, led by textiles, nonmetallic mineral products, and paper. The press release stated that “demand remains at the early stages of recovery.”

Service sector expansion slowed in March. The ISM’s Services PMI dropped 1.2 points to 51.4. The Services PMI has remained above the expansion/contraction threshold of 50.0 for 15 straight months. Indices for business activity/production and employment both inched up, while those for new orders and inventories declined. Twelve of 18 tracked service sector industries reported growth in March, led by accommodation/food services, professional services, and agriculture. The press release noted that “inflation is still a concern.”

The trade deficit widened in February. The Census Bureau and the Bureau of Economic Analysis estimate exports and imports both grew 2.3 percent to $263.0 billion and $331.9 billion, respectively. The resulting trade deficit of -$68.9 billion was up 1.9 percent from January. The goods deficit shrank by $0.3 billion to -$91.4 billion, while the services surplus narrowed by $1.6 billion to +$22.5 billion. Exports grew for industrial supplies/materials (including crude oil), food (including soybeans), and civilian aircraft. Also increasing were imports of cell phones, food, and automobiles. The U.S. had its largest goods deficits with China, the European Union, Mexico, and Vietnam.

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending March 30, 2024, First-Time Claims, seasonally adjusted): 221,000, +9,000 vs. the previous week, +5,000 vs. the same week a year earlier). 4-week moving average: 214,250 (-7.0% vs. the same week a year earlier).
• Construction Spending (February 2024, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.092 trillion (-0.3% vs. January 2024; +10.7% vs. February 2023).
• Factory Orders (February 2024, New Orders for Manufactured Goods, seasonally adjusted): $277.9 billion (+1.4% vs. January 2024; +4.6% vs. February 2023).
• Vehicle Sales (March 2024, Automobiles and Light Trucks, seasonally adjusted annualized rate): 12.462 million (-1.1% vs. February 2024; +4.6% vs. March 2023).
• Consumer Credit (February 2024, Outstanding Non-Real Estate Backed Consumer Credit Balances, seasonally adjusted): $5.051 trillion (+$14.1 billion vs. January 2024; +2.5% vs. February 2023).

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