Payrolls Indicate to Markets; Strong Labor Recovery Not Just Yet
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Payrolls moved up by +162K in March, compared to a forecast of +184K. Combined January and February revisions totaled an additional 40K jobs created. March added 48K census workers making the ex-census change in payrolls a modestly strong +136K. It is impossible to determine to what extent weather had on this report, but I expect payrolls should maintain modest growth, at best, over the next several months (ex-census). The unemployment rate remained steady at 9.7%, as the workforce continues to increase. This report is essentially neutral for the market. Long term unemployment continued to tick up, while average hourly earnings fell -0.1% from last month. Hours worked remain relatively low at 34.0%, and will likely move up a bit more before we see a big turn in hiring. While overall these modest gains are positive, it is unlikely it will have a significant effect on Fed policy over the short-term.
On another note, temp employment continues to tick up, however, it has begun to come off of its recent highs. This index tends to be a good forward looking indicator toward the overall payroll number:
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