Friday, April 04, 2008

Non-Farm Payrolls Decline More Than Estimates, Unemployment Rises, Average Hourly Earnings Healthy

- The Change in Non-farm Payrolls for March was -80K versus estimates of -50K and -76K in February.

- The Unemployment Rate for March rose to 5.1% versus estimates of 5.0% and 4.8% in February.

- Average Hourly Earnings for March rose .3% versus estimates of a .3% rise and a .3% gain in February.

BOTTOM LINE: The US lost jobs for a third consecutive month in March and the unemployment rate rose to the highest level since September 2005, Bloomberg reported. The decline in payrolls included a loss of 24,000 jobs in the auto manufacturing and parts industries, which the government said largely reflected the effects of the strike at American Axle, a supplier to General Motors(GM). A walkout by workers at American Axle over pay and benefits that started on Feb. 26 has idled almost 50% of GM’s North American workforce. Builders eliminated 51,000 jobs versus 37,000 in February. Service industries, which include banks, insurance companies, restaurants and retailers, added 13,000 workers versus a 6,000 gain in February. Average Hourly Earnings for March rose a very healthy 3.6% year-over-year versus the 20-year average of 3.3% and up from 1.6% in February 2004. The Unemployment Rate rose to 5.1%, but remains below the 20-year average of 5.4% and is down from 6.3% in June 2003. After a four-month downturn, the Monster Employment Index rose for the second month in a row in March. While overall the jobs report was weaker than I had expected, a loss of 80K jobs is still well below the 200K+ monthly losses normally associated with recessions. I expect the job market to improve over the coming months.

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