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Payroll employment rose 58,000 in March, slightly better than the consensus estimate of 48,000 and the first increase in jobs in seven months. However, the unemployment rate rose to 5.7% from 5.5% in February, a notch higher than the consensus estimate of an increase to 5.6%.
In the latest payrolls survey, job declines of 37,000 in construction, 6,000 in retail, and 38,000 in manufacturing were offset by gains of 37,000 in government and 118,000 in other services. The most compelling evidence of a recovery can be seen in manufacturing (the smallest decrease since December, 2000) and personnel-supply services (up 80,000), which have taken the biggest hit in the recession. The construction drop comes after winter peaks which were boosted by the mild weather and strong public construction. The 66,000 February employment rise was revised away to a 2,000 decline.
Rounding out the report was the workweek holding at a revised 34.2 hours. Hourly earnings rose 0.3%, which left earnings on a non-seasonally adjusted year-over-year basis rising at a 3.5% rate -- well off from the 4.5% peak seen last September and the lowest rate since May, 2000. Aggregate hours rose 0.1% in March, with the February increase still 0.2% despite the downward revision of employment.
The downward revision of February payrolls is further reason for the Federal Reserve to keep monetary policy on hold, says S&P.