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Economy in Brief

U.S. Payrolls Up, Unemployment Down
by Tom Moeller April 7, 2006

Non-farm payrolls increased 211,000 during March. The gain beat Consensus expectations for a 190,000 rise but the February & January advances were both revised down slightly. Since payrolls started rising in early 2003 employment growth has averaged 1.5% at an annual rate.

From the household survey the unemployment rate fell back to 4.7%. Employment surged 384,000 (2.2% y/y) and the labor force rose 203,000 (1.6% y/y). Consensus expectations had been for an unchanged unemployment rate at 4.8%.

Since early 2003, the household survey's measure of employment growth has averaged 1.7% (AR).

The gain in construction employment slowed to 7,000 (4.3% y/y) during March following increases the prior two months which were helped by warm winter temperatures and averaged 41,000.

Jobs in private service-producing industries rose 178,000 (1.8% y/y). Jobs in retail trade rose a firm 29,400 (0.9% y/y) though motor vehicle dealers' employment fell and financial sector jobs rose 16,000 (2.3% y/y). Professional & business services employment rose 52,000 (2.8% y/y) while jobs in education & health rose 33,000 (2.4% y/y). Leisure & hospitality employment increased 42,000 (2.2% y/y).

Factory sector payrolls fell another 5,000 after a deepened 10,000 worker decline during February. Employment in the motor vehicles & parts industries fell 1,900 (-2.9% y/y) after a 14,900 February drop. The breadth of gain in factory payrolls over the last three months fell to a 45.2%, indicating broad based job loss.

Government employment rose 24,000 (0.7% y/y) though hiring by the federal government was unchanged (-0.8% y/y). During the last three years the number of federal government jobs has fallen 3.0% but during the same period state & local hiring is up 2.0%

The 0.2% gain in average hourly earnings was half the February rate increase.

Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004 from the Federal Reserve Board is available here.

Employment Mar Feb Y/Y 2005 2004 2003
Payroll Employment 211,000 225,000 1.6% 1.5% 1.1% -0.3%
  Manufacturing -5,000 -10,000 -0.4% -0.6% -1.3% -4.9%
Average Weekly Hours 33.8 33.8 33.7 (Mar '05) 33.8 33.7 33.7
Average Hourly Earnings 0.2% 0.4% 3.4% 2.8% 2.1% 2.7%
Unemployment Rate 4.7% 4.8% 5.1% (Mar '05) 5.1% 5.5% 6.0%
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