Economy adds 103K jobs in March

Economy adds 103K jobs in March
© Getty Images

The U.S. economy added 103,000 jobs in March, well below expectations, as President TrumpDonald TrumpJan. 6 committee chair says panel will issue a 'good number' of additional subpoenas Overnight Defense & National Security — Presented by AM General — Pentagon officials prepare for grilling Biden nominates head of Africa CDC to lead global AIDS response MORE's calls for billions in tariffs on imports raise concerns about their effects on the nation's steady expansion.

The unemployment rate held at 4.1 percent for the sixth straight month, the lowest level since December 2000, when it was 3.9 percent, the Labor Department reported on Friday. 

Expectations were for a March gain of about 195,000 jobs.


Jobs in the previous two months were 50,000 less than previously reported.

March job gains fell to the lowest level since just 14,000 were added in September, after hurricanes Harvey and Irma hit Texas and Florida.

January’s employment was lowered to 176,000 from 239,000 while February’s figure was better than initially reported — up to 326,000, the fastest pace since October 2015, from 313,000. 

On Thursday night, Trump asked U.S. Trade Representative Robert LighthizerBob LighthizerBiden moves to undo Trump trade legacy with EU deal Whiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' MORE to consider imposing $100 billion in additional tariffs on China, in response to Beijing’s retaliation against Washington’s tariff plans.

The trade threats against China and other allies are rattling business groups, especially farmers, and lawmakers on Capitol Hill are worried that a trade war will damage economic growth and lead to job losses.

House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradySunday shows preview: Pelosi announces date for infrastructure vote; administration defends immigration policies House panel advances key portion of Democrats' .5T bill LIVE COVERAGE: Ways and Means to conclude work on .5T package MORE (R-Texas) said the “underlying economic fundamentals and outlook for growth remain strong” despite the slower rate of job creation last month. 

"We need to sustain this momentum for the long term, which is why I have been working with the administration to ensure that actions we take to punish countries that trade unfairly are targeted to address that behavior and not our workers and job creators here at home,” Brady said.  

The Dow Jones industrial average fluctuated all morning and was down more than 600 points by 2:25 p.m.

Jobs growth is expected to slow down somewhat as the labor market tightens.

“We’re heading to full employment. High job growth, to some degree, is a symptom of a bad economy, an economy with an overall high unemployment rate that’s bringing it down,” said Jason FurmanJason FurmanThe Fed needs to articulate its framework for inflation Biden signals tough stance on tech with antitrust picks GOP seeks to make Biden synonymous with inflation MORE, head of the Council of Economic Advisers under former President Obama, on CNBC.

“Once we get to where we want to go, we’re actually going to have lower employment growth. That’s why I wouldn’t be too preoccupied with a jobs number of 100,000 or 250,000. I go straight to the wages. Because most people who want jobs have them, the question is what types of pay raises they got,” Furman said. 

In March, average hourly earnings rose 8 cents to $26.82 and were up 2.7 percent for the year, which Furman called “decent.”  

Job gains averaged 202,000 over the past three months, down from a 242,000 average in the previous estimates, which is enough to get workers off the sidelines and into the labor market.

Employers have added jobs for 90 straight months, and the economic expansion, which began in June 2009, is now in its 106th month, tying it for the second-longest expansion in U.S. economic history.

The nation's longest span of growth lasted 120 months, from 1991 to 2001, according to Nationwide Chief Economist David Berson.

In March, manufacturers added 22,000 jobs, totaling 232,000 for the past year.

Employment in mining increased by 9,000 last month. Mining employment has risen by 78,000 since a low in October 2016.

Health-care jobs, which have shown steady growth, added 22,000 jobs.

Severe winter weather likely suppressed more robust jobs growth last month with drops in retail and construction jobs.

Retail employment fell by 4,000 and construction, which posted a robust 65,000 gain in February, shed 15,000 jobs last month. 

Diane Swonk, chief economist with Grant Thornton, blamed “wacky March weather” on the lower-than-expected jobs report last month. 

Justin Wolfers, an economist at the University of Michigan, tweeted that “if you're depressed by this payrolls report, don't be.” 

“Payrolls growth of around 100k, and unemployment slowly falling, is exactly what we should expect at this stage of the business cycle," Wolfers said. "Get used to numbers like this.” 

House Democratic Leader Nancy PelosiNancy PelosiManchin cast doubt on deal this week for .5T spending bill Obama says US 'desperately needs' Biden legislation ahead of key votes Congress shows signs of movement on stalled Biden agenda MORE (Calif.) noted the lower-than-expected numbers by saying, "March’s disappointing jobs report shows that corporations and the wealthiest 1 percent continue to hoard the benefits of the U.S. economy.” 

“From the start, the White House and Republicans in Congress have put themselves and their rich donors first, and the American people last," Pelosi said. 

But PNC Chief Economist Gus Faucher said even with the disappointing report “the job market is in excellent shape in early 2018” and said job growth this year is running ahead of the 181,000 pace for all of 2017.

Overall, Berson said, expectations for payroll growth remain solid and modestly above what is likely sustainable over the longer run for the economy. 

"This suggests that the unemployment rate will decline over the next year — we expect it to end 2018 close to 3.5 percent," Berson said.

Updated at 2:25 p.m.