The U.S. economy added another round of solid job increases last month, the Labor Department said Friday, taking the first-quarter total to just over 1 million. But average earnings slowed notably, suggesting that hiring could ease into the spring as broader economic growth wanes.
The Bureau for Labor Statistics said 236,000 new jobs were created last month, just shy of the Wall Street consensus forecast of a 238,000 gain. Private payrolls were up 189,000, the BLS said, again topping Wall Street forecasts of a 215,000 gain as the unemployment rate eased to 3.5%.
The BLS also revised its February jobs-addition estimate higher, to 326,000 from its original estimate of a 311,000 net gain, while lowering its January estimate to 472,000 from its prior estimate of 504,000.
The BLS noted that hourly wages were up 0.3% on the month - matching the 0.3% gains recorded over January and February and matching the Wall Street consensus forecast. On a year-on-year basis, wages were up 4.2%, compared with the 4.6% pace recorded in February, the BLS said, and the Street forecast of 4.3%.
"The 0.3% increase in average hourly earnings, coupled with the modest revisions to January and February, means that wages rose at a 3.8% annualized rate in the first quarter, the smallest increase since Q4 2019, excluding the initial period of Covid chaos," said Ian Shepherdson of Pantheon Macroeconomics.
"The current rate of increase likely is still a bit too fast for most FOMC members, but it is clearly headed in the right direction."
"Labor demand and supply are moving back into balance, now that participation among people under 55 is now back to the pre-Covid peak; that seemed an unlikely prospect just a year ago," he added.
U.S. equity futures extended modest gains following the data release, with contracts tied to the Dow Jones Industrial Average indicating a Monday morning gain of 20 points and those linked to the S&P 500 rising 2 points.
Benchmark 10-year Treasury note yields gained 7 basis points from yesterday's levels to 3.379% while 2-year notes fell another 12 basis points to 3.958% amid an extended flight to safely linked to the crisis at tech start-up lending SVB Financial.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.16% higher at 101.989.
The CME Group's FedWatch is now indicating a 67% chance of a 25 basis point rate hike next month in Washington, up from around 43% prior to the data release, with bets that the Fed will hold rates near the 5% level through the summer starting to accelerate.
Earlier this week, the Labor Department said 228,000 Americans filed for jobless benefits over the week ending April 1, a tally that was well ahead of the Street's forecast of 200,000 new claims. The prior week's tally, meanwhile, was revised to 246,000 from an original estimate of 198,000, suggesting weakness has been evident in the job since the collapse of Silicon Valley Bank, and the subsequent closure of Signature Bank, in early March.
The Labor Department data followed figures from Challenger Gray's closely tracked report of monthly layoffs, which showed job cuts rising 15% over the month of March, to 89,703, more than triple the figures recorded over the same period last year.
First quarter job cuts, Challenger Gray said, were up fourfold from the year earlier to 270,416.
ADP's national employment report indicated only 142,000 new hires in March and the February JOLTs update showing unfilled positions fell below the 10 million mark for the first time in nearly two years.
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