Job Gains Bounce Back, Wage Growth Remains Above Three Percent

April 05, 2019

Payroll jobs increased by 196,000 in March to above the three-month moving average of 180,000 per month, and average weekly earnings have increased 3.2% from a year ago—a level last seen consistently in 2007.

The unemployment rate remained at 3.8% while the latest unemployment benefits claims at 202,000 were the lowest since 1969.

Some cracks in the jobs picture:  Manufacturing job growth has stalled due to the impact of tariffs.  Meanwhile, the number of retail jobs has fallen for three straight months.

Weekly earnings growth varies by industry:  Information (7.0%), utilities (3.9%), finance (3.9%), leisure and hospitality (3.7%), professional and business services (3.6%), and construction (3.6%) all saw strong, above-average earnings growth, while transportation and warehousing (1.3%) and manufacturing (1.3%) are rising more slowly.

Job gains were focused in four industries accounting for almost 65% of all job growth:

  • Health care (+49,100),
  • Professional and technical services (+34,100),
  • Bars and restaurants (+27,300), and
  • Construction (+16,000).

GDP forecasts rebounding:  First quarter growth forecasts have been rising with new data, leading some economists to expect growth to be more than 2%.

Looking ahead:  The majority of business economists see external headwinds from trade policy and slower global growth as the primary downside risks to growth.  However, they put the odds of a recession starting in 2019 at just 20%, and the odds of a recession by the end of 2020 at just 35%, while projecting payroll job growth in 2019 to average 173,000.