Employment Surges in March, Catching Up With the Rest of the US Economy

US employment increased by nearly 1 million new jobs in March

Written by: Skerdian Meta • Friday, April 2, 2021 • 2 min read

• Last updated: Friday, April 2, 2021

The US economy is officially back on track and steaming ahead across all sectors. Manufacturing was the first to bounce back, since it was less affected by the coronavirus restrictions. ISM Manufacturing surged to the highest level since 1983 last month, as yesterday’s report showed.

Services also caught up, surging above 60 points recently, which is a great level. Employment was lagging, with unemployment claims still in the 700K-800K region. But, today’s non-farm employment report for March was great.

New jobs surged by nearly a million, while the number for April was revised higher as well. The unemployment rate declined by 2 points, while participation rate ticked a point higher, which makes it even better. So, everything is back on track in the US.

March 2021 Non-Farm Payrolls Highlights

March non-farm payrolls +916K vs +660K expected
February non-farm payrolls were 379K
Unemployment rate 6.0% vs 6.0% expected
Prior unemployment rate 6.2%
Participation rate 61.5% vs 61.5% expected (was 62.8% pre-pandemic)
Prior participation rate 61.4%
Underemployment rate 10.7% vs 11.1% prior
Average hourly earnings -0.1% m/m vs +0.1% expected
Average hourly earnings +4.2% y/y vs +4.5% expected
Average weekly hours 34.9 vs 34.7 expected
Two month net revision +156K
Change in private payrolls +780K vs +643K expected
Change in manufacturing payrolls +53K vs +35K expected
Long-term unemployed at 4.2m vs 4.1m prior
The employment-population ratio, at 57.8% vs 57.6% prior
Full report

This report lands on Good Friday into a thin market and we saw some quick pops in the US dollar but not as large as you would expect. The unemployment rate was in line with estimates but given the uptick in the participation rate, that’s good news.

There’s nothing to dislike in this report and it should continue to lift USD/JPY and USD/CHF . I don’t see it changing much from the Fed’s perspective; we’ll need quite a few of these kinds of reports to sop up all the slack in the workforce.

The leisure and hospitality sector was the biggest driver with 280K jobs but that’s not as much as you would think with the big headline. That means there’s more re-hiring that hasn’t yet taken place and will keep the numbers high for months to come. Otherwise, the job gains were broad-based.

nonfarm payrolls chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.