Data Release: U.S. job growth gaining momentum
* U.S. non-farm payrolls rose by 216K in March, slightly above market expectations for 190K. Private sector hiring expanded by 230K, also above consensus for 206K.
* Revisions were positive but relatively minor adding a net 7K to payrolls.
* Government payrolls continued to contract in March, declining by 14K, an improvement from the 34K drop in February, but marking the fifth straight month that government payrolls have subtracted from the total. The decline was entirely at the local government level, a trend that is likely to continue over the remainder of this year.
* Goods-producing employment rose by a respectable 31K and manufacturing by 17K. Private services-producing employment accelerated nicely, growing by 199K jobs in the month - its strongest post-recession pace to date.
* In what has now become a four month trend, the unemployment rate fell to 8.8% from 8.9% in February. Importantly, the decline was due to a relatively strong 291K job gain in household survey employment and came even as the labor force grew by 190K.
* The underemployment rate - including discouraged workers and part-time for economic reasons also declined for the fourth straight month to 15.7%, down from a peak of 17.0% in November.
Key Implications
* After a long winter, the U.S. labor market is showing real signs of a spring thaw. Private job creation in the first three months of 2011 marks the fastest pace the U.S. recovery has seen to date. This is the strongest signal yet that the U.S. recovery has entered a new phase of self-sustained private demand driven growth.
* Strength in the job market should alleviate some of the concerns raised by the slowdown observed in other economic indicators over the last several weeks and signs that economic growth in the first quarter of this year has decelerated from the 3.1% outturn of the previous quarter. With continued job growth, this should prove to be a temporary setback.
* While risks to the recovery remain, the majority of them are from sources external to the U.S. As long as the job market continues to participate in economic growth, the key domestic risk- namely the condition of the housing market - should follow suit with more meaningful mprovement. If these two pieces fall into place, the U.S. economy should prove resilient against the negative outside forces.
* With employment momentum picking up, the task for the Federal Reserve will turn increasingly to managing the exit strategy. While there's still a long way to go before normalcy in the job market, a continuation of numbers like today's will require a shift in attention towards the second item of the Fed's dual mandate - ensuring stable prices.
I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino P. Eng. Broker Specializing in Residential & Investment Real Estate RE/MAX Realty Specialists Inc. Providing Full-Time Professional Real Estate Services since 1987 BUS 905-828-3434 FAX 905-828-2829 CELL 416-520-1577 mark@mississauga4sale.com Mississauga4Sale.com
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