• US adds 196,000 jobs in March

• Unemployment rate remained at 3.8%

• Labor force participation rate down two ticks to 63.0%

• Wage growth edged lower

• Demand for labour remains strong

After disappointment in February, job creation bounced back nicely in March. The US created 196,000 new jobs last month, an encouraging gain that hints growth in the economy is ready for a revival. Net revisions for the prior two months increased 14,000 as the increase in jobs in February was revised up to 33,000 from 20,000 while January job gains were little changed at 312,000. The US added an average of 180,000 jobs in the first three months of 2019 - a solid if somewhat slower pace compared to the tail end of last year.

Hiring increased in most major segments of the economy, most notably health care and white-collar firms. Health-care providers added 49,000 jobs. Professional and technical firms hired 34,000 workers, restaurants increased staff by 27,000 and construction companies took on 16,000 new workers. Pockets of weakness were found in manufacturing and retail. Manufacturers trimmed 6,000 jobs, which is the first fall for this component since July 2017, after barely any gain in February. And retailers eliminated 12,000 jobs.

The flush of new jobs kept the unemployment rate near a 50-year low of 3.8%. The overall labor force participation rate was down two ticks to 63.0% in March. The participation rate is still a tick above its year ago level, but as baby boomers increasingly move into retirement, there will continue to be downward pressure on the headline participation rate.

Growth in average hourly earnings was a tad soft, up 0.1% mom in March. On a year on-year basis, wages were still up a healthy 3.2% in March, down from a 3.4% pace in February.

Source: BIMB Securities Research - 8 Apr 2019