The March 2008 U.S. employment numbers have been released by the Bureau of Labor Statistics today. How do the latest figures match up against the two key benchmark measures as set out at the bottom of this report?

Results: The Bureau of Labor Statistics has just released the March 2008 employment figures for the U.S. economy. For the third straight month, there was a substantial decline in the total number of jobs. Non-farm payroll employment fell by 80,000 in the latest month to go along with declines of 76,000 in both February and January. In other words, the total number of jobs lost in the first quarter of this year has been 232,000. The unemployment rate rose to 5.1% in March from 4.8% in February.

The figures on the labor market in the U.S. are consistent with worries about an economy that may be in recession. Year-over-year total employment, at +0.4%, is now barely registering a positive change. By way of comparison, the peak employment increase in this latest cycle occurred in March 2006 at +2.0%. Two years later, the numbers fall well short of the benchmark indicators as set out at the bottom of this report.

Five sub-sectors are recording year-over-year declines in employment: construction (-4.6%); manufacturing (-2.2%); financial activities (-1.3%); information services (-0.7%); and retail trade (-0.7%). Only three sectors are turning in good numbers on job creation, year over year: education and health (+3.0%); leisure and hospitality (+2.5%); and government (+1.1%).

The weakness on the jobs front is keeping wages down. Average hourly earnings are up by 3.6% and average weekly earnings are ahead only 3.3% in the latest month versus a year ago.

The U.S. jobs story is not a surprise. Unpleasant news is likely to continue for a while. However, there are an increasing number of positive developments taking place with respect to the U.S. economy. There is more elaboration on this subject in a separate Market Insights story entitled 10 Steps to a Better U.S. Economy. (See report.)

The March 2008 Canadian labour market story has also been released today (by Statistics Canada). See separate blog entry.

Two Key Benchmark Measures: There are two benchmark figures to target with respect to U.S. employment: (1) +1.2% year-over-year job growth; and (2) +140,000 as the long-term average increase in the month-to-month number of jobs. As long as these targets are being approached or exceeded, it is hard to say too much negative about the U.S. labor market. If the latest figures fall short, the economy may still be okay as long as some other key indicators are positive. However, if the latest figures fall short and there are other indications of slowdown, then warning signs start to flash about overall weakness in the economy. Job growth leads to income growth, which drives consumer spending (70% of U.S. Gross Domestic Product).

Alex Carrick

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