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What's going on?
A major monthly report on US jobs came out on Friday and, although it marked a slowdown in the pace of hiring, the news wasnt all bad
What does this mean?
The US economy created fewer jobs in March than in previous months (and fewer than economists were expecting), but this might have been due largely to the weather: it was unseasonably warm in February and much colder in March, which likely led to a hiring boom in construction and other weather-dependent jobs in February that wasnt sustained in March. Also, the unemployment rate fell and, perhaps more importantly, a broader measure of underemployment also declined. In short, there are fewer potential workers on the sidelines, which is a good thing for workers and the overall economy.
Why should I care?
For you personally: Wage growth isnt really accelerating yet. (tweet this)
As fewer and fewer workers are left on the sidelines, workers wages are supposed to grow faster (due, essentially, to supply and demand). Right now this is only sort of happening. Wage growth hit its highest annual level since the financial crisis in December, but it has moderated slightly since if so many people are getting hired, it should be accelerating. Its not totally clear why wages arent rising faster but many economists expect wage growth to increase soon. If it doesnt, it would suggest that the employment picture isnt quite as strong as the headline statistics indicate (this dynamic is broadly true in the UK and Europe too).
The bigger picture: Data on the US economy is kind of confusing right now.
On the one hand, the employment picture remains quite strong and a number of indicators suggest that US economic growth increased in the first quarter of this year. However, most of those indicators were soft data that is largely based on surveys rather than real activity. Measures of actual output suggest that the US economy may have grown at the slowest pace in several years during the first quarter. It appears that the US economy has picked up its pace, but were still waiting for the hard data to confirm that.
Originally posted as part of the Finimize daily email.
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