This morning’s jobs report shows that 196,000 jobs were added in March, well above the 20,000 first reported in February. February’s number was also revised up in today’s report, to 33,000. Those of us anxious about signs of slowing in the U.S. economy can rest a bit easier today, as this is a good indication that February’s extraordinarily weak job growth number was an outlier.
The better parts of February’s jobs report—low unemployment and near-healthy wage growth—were mostly replicated in March. Unemployment in March stayed steady at 3.8 percent, and over the past 12 months average hourly earnings rose by 3.2 percent for all workers, and 3.3 percent for non-supervisory workers. This is welcome, but not exceptional wage growth, and is actually a slight slowdown relative to recent months. There is definitely room for wage growth to shift into a higher gear before sparking fears of wage-driven price inflation. But March’s report seems to signal that, since the beginning of 2018, we have shifted into a period of notably better wage growth than any previous span of the current expansion.
Another reassuring sign was a drop in the African American unemployment rate, which had worryingly risen for three months prior. In March, African American unemployment was 6.7 percent, down from 7.0 percent the previous month. A long historical legacy of racial discrimination that denied African Americans equal access to jobs and opportunities has led to African American unemployment consistently registering twice as high as unemployment for white workers, but the breaking of the recent trend towards upward movement in this rate is good to see.
The data from the household survey wasn’t all good. The share of adults between the ages of 25 and 54 with a job (the “prime age” employment-to-population ratio, or PAEPOP) ticked down a percentage point to 79.8 percent. This measure has not exceeded 80 percent since January 2008, the very first month of the Great Recession. It will take at least another month to regain this (not very impressive) benchmark.
All in all, this was a welcome report after last month’s hiccup.