The economy hit a slump in March, creating the fewest new jobs in 15 months and fueling more speculation as to whether the United States is seeing early signs of a slowdown, or simply experiencing a passing phase due to weather and other factors. The Bureau of Labor Statistics issued its latest economic release on April 3, reporting that 126,000 new jobs were added to the economy in March and the unemployment rate remained unchanged at 5.5 percent. However, earlier employment projections for January and February were adjusted to subtract 69,000 jobs from the first quarter’s total. The result is that hiring decreased dramatically in the first quarter to 197,000 from 289,000 in fourth quarter 2014.
Job gains were largely concentrated in the professional and business services, healthcare and retail trade sectors in March. The professional and business services industry added 40,000 total jobs to its payrolls, with architectural and engineering services, computer systems design and related services, and management and technical consulting services all adding 4,000 new jobs respectively.
Healthcare continued to trend upward, adding 22,000 jobs in March. Over the year, the sector has added 363,000 jobs. Job gains were largely seen in ambulatory health care services (+19,000) and hospitals (+8,000), while nursing care facilities lost jobs (-6,000).
Worker Pay Increases, But Overall Wage Growth Still Sluggish
A bright spot in the March jobs report was an increase in average hourly wages by 0.3 percent, bringing the increase in wages over the past 12 months to 2.1 percent. Although wages are rising, the overall pace of growth remains lackluster. Wage gains have averaged about 2 percent since 2010, two-thirds as fast as they normally grow, with the goal being to achieve a wage growth of 3.5 percent or better.
Americans Reluctant to Spend
Many economists believe slower wage growth is a major reason why many Americans still aren’t spending money, despite lower gasoline prices and strong employment growth in previous months.
However, others attribute slower retail spending to Mother Nature. Durable goods orders declined in February while retail sales dropped 0.6 percent in February, marking the third straight month of declines and the first time since 2012 that retail sales have dropped for three consecutive months.
Fewer Unemployed Americans
The Labor Department also reported in March that the number of Americans filing for unemployment fell to a 15-year low with 268,000 new claims filed in the last week of March. That brings the four-week moving average – a better indicator because it smooth’s out the normal bumps in the road – to an encouraging 285,500. Long-term unemployment remains a problem for mature workers, however.
A report issued by the AARP Policy Institute this week noted that last year, on average, 45 percent of ob seekers aged 55 and older were out of work for 27 weeks or more.
Employee Confidence Levels Highest In 10 Years
Randstad’s Employee Confidence Index, which tracks workers’ monthly perspectives around jobs and the economy, reached a 10-year high of 62.3 during the first quarter of 2015 and reflects very strong confidence levels among workers in the overall economy and in the job market. More workers said they believe there are more jobs available, and expressed continued confidence in their ability to secure them.
Additionally, the Randstad Macroeconomic Confidence Index, which measures employees’ confidence in the overall strength of the economy, reached 54.4 during the first quarter, marking the highest level since Randstad began tracking it in 2004.