As Q1 closes out, the Labor Market is showing signs of cooling, with hiring slowing and the smallest monthly employment increase in more than two years. Worker availability improved slightly; however, the market is still tight and finding workers with desired skills and experience remains challenging. Average hourly earnings moderate to 4.2% in March from 4.6% in February without an uptick in the unemployment rate, reflecting a strong but cooling market.
The Numbers*:
- The unemployment rate changed a little, going to 3.5% from 3.6%.
- New jobs added: 236,000 jobs were added in March, below the average of 334,000 per month over the last six months. Also, slightly below expectations of 238,000.
- Open jobs decreased to 9.9M, falling below 10 million for the first time in nearly two years.
- The labor force participation rate continued a slight trend up from 62.5% to 62.6% in March but remains a full point below the February 2020 pre-pandemic level of 63.6%.
- Job quits (4.0 million) edged up from 3.8K in February, while layoffs and discharges (1.5 million) decreased.
- Wage growth saw a 0.3% increase in regular hourly earnings overall.
Industry Trends:
Employment continued to trend up in up in leisure and hospitality, government, professional and business services, and health care.
- While leisure and hospitality added 72,000 jobs in March, that was lower than the average gain of 95,000 over the previous six months.
- Most of the gains were in food services and drinking places. Wage growth is high in this category (6.1% over a year ago) primarily due to labor shortages.
- Government hires increased by 47,000 which was in line with the prior six-month averages. The sector remains below the February 2020 level by 314,000 or 1.4%.
- Professional and business services continued to trend up in March (+39,000) with most sector growth in professional, scientific and technical services.
- While health care added 34,000 jobs, it was fewer than the average gains of 54,000 over the last six months. Within the sector gains included +15,000 in home health care, +11,000 in hospitals and +8000 in nursing and residential care facilities.
- Retail and construction were the biggest losers at -14.6K and 9K jobs lost respectively.
Interesting Changes:
- Less flexibility is evident in a few Districts as firms are becoming less flexible with employees and reducing remote work options.
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* Above represents March 2023 Data
Sources:
- https://www.bls.gov/news.release/jolts.nr0.htm
- https://www.bls.gov/news.release/empsit.nr0.htm
- https://www.cnbc.com/2023/03/30/jobless-claims-edge-up-to-198000-higher-than-expected-.html
- https://www.cnbc.com/2023/04/04/jolts-february-2023-.html
- https://www.cnbc.com/2023/04/07/jobs-report-march-2023.html
- https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20230308.pdf
- https://www.foxbusiness.com/economy/are-tech-layoffs-canary-us-jobs-market
- https://finance.yahoo.com/news/labor-market-cooling-employment-growth-224517275.html
