The U.S. dollar index softened initially in reaction to a disappointing monthly nonfarm employment peg of 98,000 jobs added in March, but quickly firmed to trade above pre-report levels by 8:00 a.m. CT. Meanwhile, the unemployment rate dropped to 4.5%.
Investors expected this morning’s Employment Situation Summary from the government to reflect an increase in 175,000 nonfarm payrolls added last month, with unemployment holding steady at 4.7%. The report states, “Employment increased in professional and business services and in mining, while retail trade lost jobs.”
Revisions
Additionally, the change in total nonfarm payroll employment for January was revised down from +238,000 to +216,000, and the change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January and February combined were 38,000 less than previously reported. Over the past three months, job gains have averaged 178,000 per month.
The average workweek was unchanged at 34.3 hours in March and the average hourly earnings for all employees on private nonfarm payrolls increased by five cents to $26.14, following a seven-cent increase in February. Over the year, average hourly earnings have risen by 68 cents, or 2.7%. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by four cents to $21.90.
Vince Malanga, Pro Farmer consulting economist and president of LaSalle Economics, Inc., says the monthly payroll and revisions are obviously weak compared to expectations and relative to recent Federal Reserve “rhetoric.” He adds, “Seasonal adjustments definitely affected the data but one cannot ignore the weakness in retail payrolls given the announcement of massive store closings.”
Malanga says the most significant component was the downward revision in the workweek and in aggregate hours. “For the quarter the index of aggregate hours is up only 0.75% annually in the first quarter,” he says.
