U.S. hiring slowed in March to a net increase of 126,000 jobs, ending 12 consecutive months of job gains above 200,000 — the longest streak of above-average employment growth since 1994.
Job gains in the previous two months were also revised lower by a combined 69,000, according to a report issued Friday by the U.S. Labor Department, but the setback is probably an aberration, said PNC Bank economist Gus Faucher.
“We had a number of one-time drags that were factors — in particular, the weather — so I do think we will see job growth bounce back up to 200,000 or above," he said. "That’s a good solid number, and I think we’ll see that throughout 2015.”
President Barack Obama greets employees on a tour of software development company InDatus in Louisville, Kentucky, where he stopped to highlight his TechHire jobs initiative, April 2, 2015.
Economists noted that for months, hiring has been stronger than other gauges of the economy, suggesting that a pullback in job gains was inevitable.
Job growth has been "increasingly out of tune with other economic indicators," James Marple, senior economist at TD Economics, wrote in a research note. "The reckoning in March closes at least some of this gap.''
Besides the weather, plunging oil prices contributed to a decline of 11,000 jobs in the mining and logging sector, which includes the oil industry, and a stronger dollar resulted in 1,000 fewer manufacturing jobs. Construction employment also fell by 1,000, the first drop in 15 months.
But some categories showed gains. Health care added 22,000 workers. Professional and business services — a sector that includes lawyers, engineers, accountants and office temps — gained 40,000. Financial services expanded by 8,000, and retailers maintained their 12-month pace by adding 25,900.
The Labor Department said the unemployment rate remained steady at 5.5 percent. The number of unemployed Americans was little changed at 8.6 million.
A recent survey by the National Association for Business Economics suggests the U.S. job market is starting to tighten up. NABE spokesman Ken Simonson said that should eventually lead to higher wages.
“Many business people report they’re having trouble finding workers, and you would expect that to show up in their paying higher wages — either to bring workers in or pay more overtime," he said.
The latest jobs data suggested that’s already happening. Average hourly earnings rose 7 cents last month, to $24.86 an hour. It wasn't a lot, but Faucher said that represented a 2.1 percent wage increase from last year.
“That’s much better than inflation, given the huge plunge we’ve seen in energy prices," he said. "So consumers are seeing stronger incomes, and that will be a positive for consumer spending growth throughout 2015.”
Investors did not seem too worried about the latest employment data. Economists said that’s probably because the weaker-than-expected job growth might cause the Federal Reserve to delay an anticipated rate hike until later in the year.
Some information for this report came from AP.