The Unemployment Rate Jumps in the US, While Employment Crashes

The unemployment rate has been pretty low in the US for more than a year, at around 3.5%-3.6%. But, that wasn’t going to last, since good things never last here on Earth. Unemployment was expected to increase to 3.8% from 3.5% in February, but jumped to 4.4%.

That wasn’t a big surprise, considering the jobless claims in the last 2 weeks which were enormous in terms of numbers. The employment report was also pretty bad; US March non-farm employment change also declined by a massive -701K against -100K expected. This is the worst month since 2008-09 crisis. Below is the employment report:

Non-Employment Change Report

• March non-farm payrolls -701K vs -100K expected
• The worst month since the financial crisis
• February was +273K
• Household survey shows employment fell 3 million
• U6 underemployment 8.7% vs 7.0% prior
• Private payrolls -713K vs -132K exp
• Manufacturing -18K vs -12K exp

Unemployment Report

• Unemployment rate 4.4% vs 3.8% expected (3.5% in february)
• Largest one-month rise in unemployment since 1975
• Two month net revision -57K
• Participation rate 62.7% vs 63.4% prior
• U6 underemployment 8.7% vs 7.0% prior

Average Earnings Report

• Avg hourly earnings +0.4% m/m vs +0.2% exp
• Prior avg hourly earnings +0.3%
• Avg hourly earnings +3.1% y/y vs +3.0% exp
• Prior avg hourly earnings 3.0%
• Avg weekly hours 34.2 vs 34.1 exp

So, the unemployment rate jumped higher. But the participation rate also ticked 3 points higher to 62.7% from 63.4% in February, so that has had a negative impact on the jobless claims. Although, the average hourly earnings increased by +0.4% MoM in March, against +0.2% expected, while earnings YoY also increased to +3.1% vs +3.0% expected.