WASHINGTON — U.S. employers cut back sharply on hiring in March, yet Friday’s jobs report still had much to be encouraged about, including a drop in the unemployment rate to 4.5 percent, the lowest in a decade.
WASHINGTON — U.S. employers cut back sharply on hiring in March, yet Friday’s jobs report still had much to be encouraged about, including a drop in the unemployment rate to 4.5 percent, the lowest in a decade.
Employers added just 98,000 jobs, the Labor Department said. It was barely half the previous month’s gain.
Yet unemployment dropped from 4.7 percent, reaching its lowest point since May 2007. While the rate has fallen in the past because of unemployed workers who had given up looking, it happened this time because of a healthy gain in the number of people with jobs.
“Within the disappointing 98,000 net new jobs added, there seems to be a lot more going on beneath the surface, and what is going beneath the surface is mostly good,” said Mark Vitner, an economist at Wells Fargo.
Here are the positive aspects of the report, followed by some parts that were not so hot:
• Job growth still OK: In the past three months, employers have added an average of 178,000 jobs a month. That’s much better than March’s increase and is closer to the underlying trend, economists said.
That’s also just below the average gains of 187,000 jobs a month last year. Hiring should rebound closer to that level in the coming months, economists say.
• Better jobs: The job gains last month, while tepid, occurred in better-paying industries, such as manufacturing and a category that includes accounting, engineering and other professional services.
Lower-paying fields, such as retail, cut jobs, while a category that includes restaurants and hotels posted a small gain.
And all the new jobs added were full time, the government said. The number of Americans who are working part time but would prefer a full-time job fell.
Yet there were some discouraging signs:
• More optimism, same economy: Consumer and business optimism has soared since the presidential election. Many companies eagerly await the tax cuts and deregulation promised by President Trump.
Yet so far, there is little evidence that better sentiment has translated into more hiring, spending or economic growth. Companies are adding workers at the same pace they did last year.
• Stagnant wages: Average hourly earnings climbed 2.7 percent over the past year, not much of a win for workers. And after factoring in inflation in the past year, paychecks are essentially flat.
“Right now, real wages are basically stagnant,” said Megan Greene, chief economist at Manulife Asset Management. “That’s why things like retail sales growth and other indicators for consumer demand have been so anemic.”