Moderate Cheers for Moderate Job Growth
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CALABASAS, CA—March’s national hiring numbers from the US Bureau of Labor Statistics, while hardly explosive, give cause for moderate cheer, say experts from Marcus & Millichap Real Estate Investment Services and Auction.com Research. However, both Hessam Nadji at MMI and Chris Muoio at Auction.com note that the gradually improving picture doesn’t eliminate some dark clouds on the horizon.
“The expansion of payrolls affirms that the US economy is charting a steady rate of growth and assures that the Federal Reserve will remain committed to its pledge of tapering its stimulus program,” writes Nadji, managing director of research and advisory services at MMI, in reference to the 192,000 jobs added in March and the upwardly revised national tally of 197,000 for February. Nadji predicts that the labor market “should build momentum during the coming months and accelerate growth to add 2.7 million jobs this year.”
He notes that although factories trimmed payrolls and government staffing was flat in March, “all other employment sectors added workers last month. One-half of the 57,000 positions added in the professional and business services sector were attributable to growth at temporary employment agencies. The termination of long-term unemployment benefits last December will spur temporary hiring over the next several months.” Additionally trade, transportation and utilities establishments hired 38,000 workers last month, mainly in retail, thanks to new store openings.
Looking at February’s revised numbers, Muoio, senior associate and economist with Auction.com Research, notes that labor force participation reached 63.2% during the month, its highest level since February. “This is still a depressed level but it appears the labor force has bottomed, which is an encouraging sign for the pace of growth going forward,” says Muoio. “Federal Reserve Chairwoman Janet Yellen has been vocal in her desire to see participation rise and how unemployment is understating the slack in the labor force.”
For March, Muoio observes that the Maximus Employment Acceleration Index “improved drastically” during the month, but remains negative “as the large government sector remains a persistent drag.” In addition, the pace of growth in healthcare has slowed, and this weighs on the index. Even so, the index—which measures growth on a scale of –100 to 100—measured –17.3 in March, an improvement compared to –32.3 in February.
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