Econ Corner Analysis Title - March 2024

U.S. Employment increases by 303,000 jobs in March

KEY TAKEAWAY: According to the Bureau of Labor Statistics (BLS) recent report, employment in the U.S. continued its impressive run in March 2024 gaining 303,000 additional jobs, while the unemployment rate declined to 3.8%. 
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Econ Corner - March 2024 (5)
Econ Corner - March 2024 (6)
Econ Corner - March 2024 (7)

Employment

  • In Brief: Employment numbers in March tied May 2023 for the best performance since the beginning of last year. Our expectation is that employment growth will slow down but will continue to add jobs at a slower pace in the coming months, indicating that businesses are still looking to expand but more gradually.

  • Diving in: March was a major milestone in the recovery from the pandemic. Employment in Leisure & Hospitality finally surpassed its February 2020 level, the last major sector to achieve this.  The sector saw percentage changes in wages that routinely exceeded the other sectors, but potential employees were slow to respond to the financial enticement.

  • Why it Matters: The Federal Reserve has not wavered from its plans to cut interest rates in 2024.  However, the strong labor market results in March give the Fed more wiggle room to keep rates higher if the elevated inflation results in January and February persist.

Unemployment 

  • The Big Picture: The U-6 unemployment rate, which includes discouraged, underemployed, and unemployed workers in the country, stayed at 7.3% in March, after increasing each of the previous three months. The narrower U-3 unemployment rate, which indicates only the number of unemployed people actively seeking a job, fell from 3.9% in February to 3.8% in March. 

  • What Does This Mean?: The fall in the U-3 unemployment rate, along with an uptick in the labor force participation rate, indicates a labor market that is tightening, which is somewhat opposite of what these figures have been showing for the last four months.

By the Numbers: Employment & Unemployment 

The chart above tracks the monthly national employment figures.

The unemployment rate measures the percentage of the labor force that is currently without a job. The national unemployment rate has remained steady throughout 2023 and now into 2024, fluctuating between 3.7% and 3.8%. 

U-3 unemployment rate is the most commonly reported rate in the United States, representing the number of unemployed people actively seeking a job. The U-6 rate covers discouraged, underemployed, and unemployed workers in the country.
The labor force participation rate is an estimate of an economy’s active workforce. YTD the U.S. labor force participation rate ranged between a low of 62.5% and a high of 62.8%, according to the U.S. Bureau of Labor Statistics (BLS). 
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Geographic Solutions Employment Forecast
Geographic Solutions Unemployment Forecast
Wall Street Journal Employment Forecast
Wall Street Journal Unemployment Forecast
ADP Employment Forecast

How We Matched Up

  • Geographic Solutions: Job creation finished ahead of the Geographic Solutions' expectations of 226,000 jobs and further ahead of the Wall Street Journal's survey expectation of 200,000 jobs.

  • The Wall Street Journal: The Wall Street Journal's expectations of 200,000 additional jobs being added to the labor market was well below what was recorded in the labor market report. However, the publication accurately forecasted a 0.1% drop in this month's unemployment rate. 

  •  ADP: According to ADP’s latest report, the private sector added a significant 184,000 jobs in March, which was the biggest jump in hiring since July 2023. 

By the Numbers: Comparing Forecasts

The chart above tracks the national employment forecasts for Geographic Solutions, The Wall Street Journal, and ADP Private Payroll. Geographic Solutions is represented by the horizontal blue line to the right.

The chart above tracks the national unemployment forecasts for Geographic Solutions, The Wall Street Journal, and ADP Private Payroll. Geographic Solutions is represented by the horizontal blue line to the right.

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Econ Corner - March 2024 (8)
Econ Corner - March 2024 (9)
Econ Corner - March 2024 (10)

  Stock Up: Private Edu. & Health Services, Government

  • Key Takeaway: We saw government-related jobs and private sector education & health jobs combine to add 159,000 jobs in March, constituting more than half of all employment growth.

  • Why: Both sectors have been major drivers of employment expansion over the last year.  These two also have the benefit of being inflation-proof compared to other sectors.

Stock Down: Manufacturing, Information

  • Key Takeaway: Manufacturing and Information saw no job creation in March.

  • Why: Manufacturing employment has been stagnant for 6 months which carried over to March. The information sector is weighed down by job losses in motion pictures, broadcasting, and content providers.
NEW ECON CORNER HEADERS (1)
Will job creation remain robust over the coming months?
Based on the numbers from the latest report, we anticipate employment growth will slow down but will continue to add jobs at a slower pace in the coming months. This indicates that businesses are still looking to expand but more gradually.

 

Do workers or employers have more power in the labor market?

Neither side has a definitive upper hand, but it appears that the decline in unfilled job openings is giving employers more influence in the job market.

How has the labor market shifted since March 2023?
The labor market has continued to add jobs without slowing down despite widespread expectations of a recession.

Geographic Solutions derives its employment forecast and unemployment rate forecast from internal data on the number of job openings, searchers, and employment and unemployment applications filed on Geographic Solutions' state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

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