After reporting a substantial increase in U.S. employment in the previous month, the Labor Department released a report on Friday showing job growth slowed by much more than anticipated in the month of March.
The Labor Department said non-farm payroll employment rose by 103,000 jobs in March after spiking by an upwardly revised 326,000 jobs in February.
Economists had expected an increase of about 193,000 jobs compared to the jump of 313,000 jobs originally reported for the previous month.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the substantial slowdown in job growth is a good illustration of the inherent volatility in the non-farm payroll data.
“Looking through that volatility, however, over the first three months of this year payrolls increased at an average monthly pace of 201,000, which does represent a modest improvement on the average gain of 182,000 last year,” Ashworth said.
He added, “The upshot is that even though March was weaker than we were expecting, there is still evidence of an acceleration in the underlying pace of employment growth.”
The weaker than expected job growth came as increases in employment in the manufacturing, healthcare, and mining sectors were partly offset by job losses in the construction and retail sectors.
The report also said the unemployment rate came in at 4.1 percent in March, unchanged from the five previous months. The unemployment rate had been expected to edge down to 4.0 percent.
The unchanged unemployment rate came as the labor force contracted by 158,000 people, while the household survey measure of employment fell by 37,000 people.
Meanwhile, the Labor Department said the annual rate of growth in average hourly employee earnings accelerated to 2.7 percent in March from 2.6 percent in February.
“As with core inflation, the annual rate is still muted, but there is clear evidence of an acceleration over the past few months in the monthly gains,” Ashworth said.
He added, “Overall, looking through the volatility, employment growth is trending higher and wage growth is starting to heat up.”