According to the US Department of Labor, March saw a dramatic cut-back in the number of jobs created over the previous months. The March figure came in at 103000 new positions which is well below the average of 202000 for the previous three months. Indeed, it is roughly a third of the 326000 vacancies created in February, a month with unusually strong job growth – it could simply be that some “March jobs” were filled in February.
Despite the poorer job creation figure, unemployment (those registered as unemployed and “actively seeking” work) remained unchanged at 4.1%. Some economists regard any unemployment below a 5% threshold as being full employment, however, that caveat would apply to all those of working age, but without employment rather than the definition used by the Department of Labor. The acid test for this assumption will be that a saturated employment market should start to push up wages as employers need to compete against each other to secure the services of staff from a dwindling pool of applicants. The average hourly wage has grown by 2.7% in the year to March. It now stands at $26.82. US inflation is currently at 2.2%, so there has been a modest improvement in disposable income over the past year when inflation is stripped from the wages increase. This suggests that employment is still a “sellers’ market” because wages growth remains modest.
Unemployment in the US is at its lowest level since 2000 and the US economy has steadily been creating jobs since finally emerging from the recession, caused by the Global Financial Crisis, in 2010.
The jobs that were created saw opportunities in manufacturing and health care whilst the construction sector employment opportunities contracted in March (jobs being lost). The labour force participation rate (the proportion of working age Americans in work or actively looking for it) stands at 62.9%. This implies that well over a third of Americans that could be looking for work are choosing not to – many of these people will be raising families, of course, but the labour force participation rate is still well below the pre-Global Financial Crisis rate.
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