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Economy in Brief

U.S. Payroll & Earnings Growth Remains Firm as Unemployment Rate Declines in March
by Tom Moeller  April 1, 2022

• Service sector job growth slows.

• Hourly earnings gain accelerates.

• Jobless rate falls to lowest level in over two years.

Nonfarm payroll employment increased 431,00 (4.6% y/y) during March following a 750,000 February increase, revised from 678,000. A 490,000 March gain had been expected in the Action Economics Forecast Survey. The 504,000 January increase was revised from 481,000.

Average hourly earnings rose an expected 0.4% last month (5.6% y/y) after increasing 0.1% in February, revised from no change.

The unemployment rate fell to 3.6% in March from 3.8% in February. A 3.7% rate had been expected. Employment in the household survey increased 736,000 last month following a 548,000 February rise. The labor force rose by 418,000 workers after increasing 304,000 in February. The overall unemployment rate, including those who were marginally attached or working part-time for economic reasons, fell to 6.9% after rising to 7.2% in February.

Last month's gain in payroll employment was led by the private service sector where jobs increased 366,000 (5.6% y/y) following a 637,000 February gain, revised from 549,000. Leisure & hospitality sector jobs rose 112,000 (16.1% y/y), the weakest since a decline in December 2020. Employment in the professional & business sector improved a steady 102,000 (5.6% y/y) as temporary help increased 4,900 (10.8% y/y). Trade, transportation & utilities employment rose 54,000 (4.3% y/y) as retail trade employment growth slowed sharply to 49,000 (3.9% y/y). Education & health services employment growth halved to 53,000 (2.6% y/y). The number of financial sector workers also weakened to 16,000 (2.0% y/y) and information services jobs also improved 16,000 (5.8% y/y) after a modest February decline. Government sector payrolls rose a lessened 5,000 (1.3% y/y) in March but state government jobs fell 14,000 (0.4% y/y).

Factory sector employment rose a steady 38,000 last month (3.3% y/y) but construction sector payroll growth eased to 19,000 (3.2% y/y).

The 0.4% rise in average hourly earnings was paced by a 1.2% increase (11.8% y/y) in leisure & hospitality earnings while financial sector pay rose 0.8% (3.6% y/y).

The length of the private sector average workweek dipped last month to 34.6 hours and reversed the February increase. Manufacturing sector hours held steady at 40.7 but the financial sector workweek eased to 37.6 hours from 37.7 hours in February. Hours-worked in the professional & business service sector fell to 36.7 hours from 36.8. The education & health services workweek held at 33.5 hours, its highest level since March 2021. The leisure & hospitality workweek rose to a lengthened 26.0 hours.

From the household employment survey, the lower 3.6% unemployment rate in March reflected a rise in the labor force participation rate to 62.4%, its highest level in two years.

The employment/population ratio for all workers rose to 60.1% in March from 59.7, well above its 51.3% low in April 2020. It remained below the February 2020 high of 61.2%.

The average duration of unemployment declined to 24.2 weeks in March, down from the high of 31.6 weeks in June of last year. The median unemployment duration fell sharply to 7.5 weeks and remained below a recent high of 19.6 weeks in June of last year.

The employment & earnings data are collected from surveys taken each month during the week containing the 12th of the month. The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.

Employment (SA, M/M Change, 000s) Mar Feb Jan Mar Y/Y 2021 2020 2019
Payroll Employment 431 750 504 4.6% 2.8% -5.8% 1.3%
 Previous Estimate -- 678 481 -- -- --
  Manufacturing 38 38 26 3.3 1.5 -5.1 1.0
  Construction 19 57 6 3.2 2.2 -3.2 2.8
  Private Service-Producing 366 637 460 5.6 3.6 -6.6 1.4
  Government 5 11 12 1.3 0.1 -2.8 0.7
Average Weekly Hours - Private Sector 34.6 34.7 34.6 34.9 34.8 34.6 34.4
Private Sector Average Hourly Earnings (%) 0.4 0.1 0.6 5.6 4.2 4.9 3.3
Unemployment Rate (%) 3.6 3.8 4.0 6.0 5.4 8.1 3.7
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