April 03, 2015
The Labor Department reported that the economy added just 126,000 jobs in March, its weakest showing in two years. Downward revisions to the prior two month’s data brought the three month average to 197,000. Clearly, weather played an important role in the weaker than expected report, as much of the Midwest and Northeast was hit by unusually severe weather in the second half of February and early March. As a result, construction lost 1,000 jobs after adding an average of 36,000 jobs in the prior four months. Manufacturing also lost 1,000 jobs after adding an average of 21,000 in the prior four months. Restaurants added 8,000 jobs in March, compared to an average of 43,000 a month from October to February. While not all of this slowdown was due to weather, it surely was an important factor.
Some other sectors, most notably mining, showed weakness that was not primarily weather-related. Mining lost 11,100 jobs in March, 1.3 percent of total employment, a decline which was undoubtedly due to the plunge in oil prices. The government sector also shrank slightly, losing 3,000 jobs due to a decline of 4,000 in state-level employment.
There were some positive items in the report. Self-employment is up by 250,000, roughly 2.0 percent, from its year-ago level. This is a possible dividend of the end of health care related job lock due to the Affordable Care Act. Also, there was a plunge of 5.0 percentage points in the unemployment rate of black teens to 25.0 percent. This is the lowest level since November of 2000. Most likely it is anomaly that will be reversed next month, but if part of the drop sticks, it does mean a serious gain.
