Still Moving Forward
Employers added 120,000 net new payroll jobs in March, falling short of the +/- 200,000 expected by economists. The details of the report were mixed.
· The leisure and hospitality sector was the big winner, increasing by 39,000, followed closely by education and health services, up 37,000, and manufacturing, also up 37,000. At the other extreme, retailers shed 33,800.
· Average hourly earnings for all private employees rose by 0.2 percent last month and by 2.1 percent over the past 12 months, a decent clip but below the 2.9 percent gain in the consumer price index.
· The average workweek for all private employees was 34.5 hours, down from 34.6 in February.
· The unemployment rate ticked down a notch to 8.2 percent, the lowest level since January 2009. Although the number of unemployed persons fell by 133,000, the labor force also declined by 164,000 (fewer people looking for work). Most concerning, the number of respondents saying they had worked during the survey week – often viewed as a precursor of trends in the broader labor market – fell by 31,000 following two months of robust gains.
· The U6 rate, which includes discouraged workers and part-time workers who want a full-time job, fell sharply to 14.5 percent.
The details of the report pertaining to commercial real estate were also mixed but, on balance, positive.
· The office-using sectors of professional and technical services, information, and finance together added 19,800 net new jobs last month, down from a revised 54,000 in February. Much of that decline was in motion picture and sound recording industries.
· The sectors of the economy most important for the industrial market – namely manufacturing, wholesale trade, and transportation and warehousing – added a combined 43,900 net new jobs in March, down slightly from 52,300 in February.
· The 33,800 retail positions axed last month could be an anomaly related to seasonal adjustment factors and the warm winter. Overall, retailers are reporting good sales – a positive for leasing in shopping centers.
· The 39,000 net new jobs added in leisure and hospitality is a positive sign for the lodging industry.
Economists have been suggesting that recent job growth numbers appeared to be running ahead of GDP, possibly due to the warm winter, and the March report could be some payback for those earlier numbers.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis
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