US employment numbers disappoint again

Over the Easter break the latest non-farm payroll employment numbers were released in the US and they didn’t make for good reading. March numbers came in at an underwhelming 126,000 jobs, around half the 245,000 expected. All of these jobs were created in the 55 and older demographic whereas the number of jobs held by those under 55 years of age actually declined. This result was the weakest since December 2013. In fact, the average job increase over the last 3 consecutive months is now only 197,000. To put this into perspective, the job growth average for the last 12 months had been 269,000 and to make matters worse, the figures for the last two months have now been revised downwards indicating that the January and February data was erroneously high. 

Another troubling statistic was the labour force participation rate which dropped to 62.7% with 93.175 million Americans now not working. One would have to go back to 1978 to find a labour force participation rate this low but remember that it was at this time that women were only beginning to enter the labour force. The participation rate for men alone has never been this low in US history.

In a sign of the impact of commodity prices, it was reported that mining jobs (including support activities for oil and gas extraction) actually declined by 11,000 in March bringing job losses in this industry up to a whopping 30,000 for this year alone. This has almost negated the 41,000 jobs that were created in the industry over the entire last year.

Of additional interest is the reported 0.1 hour decline in the duration of the average work week which now stands at 34.5 hours per week. 

This all makes for sobering reading for those who believe that the US is in a genuine recovery and makes it less likely that the Fed will be raising rates at any stage during this year.