The US economy added just 98,000 jobs in March as a cold snap, a government hiring freeze and a faltering retail sector appear to have put the chill on Donald Trump’s promise to boost hiring.
The jobs market had got off to a flying start in 2017, adding an average of 236,500 jobs a month. February’s jobs report was the first under Trump and was seized upon by the president as evidence that his promise to bring back US manufacturing jobs was coming true.
Only two days ago the president took to Twitter to post: “JOBS, JOBS, JOBS!” and list the hiring decisions of major US firms since his election.
Economists had been expecting the economy to add 180,000 jobs in March but a combination of factors appear to have stalled the growth in the jobs market.
March saw snowstorms sweep across much of the eastern seaboard, which may have slowed hiring. Construction jobs rose by 6,000 in March, down from a gain of 59,000 in February. And in late January, Trump ordered a civilian government hiring freeze, calling for no vacant federal positions to be filled and none to be created until his budget director has drawn up a long-term cost-cutting plan. That decision will only now be filtering into the jobs figures.
Retailers lost 30,000 jobs in March as many of its biggest names announced plans to shut stores in the face of online competition. In the past several months, Macy’s has announced it will close 63 stores; Sears, 150; The Limited, 250; BCBG Max Azria, 120; Guess, 60; American Apparel, 104; Abercrombie & Fitch, 60; JCPenney, up to 140.
There was some good news. The unemployment rate declined to 4.5%, the lowest rate in a decade, and average hourly earnings rose 2.7%, or 68 cents, from a year earlier. But the numbers came as a shock to Wall Street, where investors were already rattled by Trump’s airstrikes in Syria.
Marcus Bullus, trading director at MB Capital, said: “The March non-farm payrolls number was a phenomenal miss and will add to market uncertainty following the Syria missile strikes. Very few traders saw this one coming.”
But other economists warned not to read too much into one month’s figures. “Although job growth slowed in March, and was much weaker than expected, the labor market remains in good shape. Job growth this year is running close to last year’s pace, and is running well ahead of what is needed to keep up with labor force growth,” said PNC chief economist Gus Faucher.
The government figures came a day after ADP, the US’s largest private payroll company, released its latest monthly survey. Private companies added 263,000 jobs in March, according to the report compiled by ADP and Moody’s Analytics, far higher than the 185,000 analysts had been expecting.
Most of the growth was in small businesses, which added 118,000 jobs. Goods-producing industries, including construction and manufacturing, added 82,000 jobs.
“Job growth is off to a strong start in 2017,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. “The gains are broad-based but most notable in the goods producing side of the economy including construction, manufacturing and mining.”