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The U.S. economy brought back more jobs than expected in March, presaging even faster employment growth in the coming months as more Americans become vaccinated and jobs across industries return.
The Department of Labor released its March employment report Friday at 8:30 a.m. ET. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:
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Change in non-farm payrolls: +916,000 vs. +660,000 expected and a revised +468,000 in February
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Unemployment rate: 6.0% vs. 6.0% expected and 6.2% in February
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Average hourly earnings, month-over-month: -0.1% vs. +0.1% expected and a revised +0.3% in February
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Average hourly earnings, year-over-year: 4.2% vs. +4.5% expected and a revised +5.2% in February
At 916,000, payrolls last month grew by the most since August. Payrolls for both January and February were also revised higher: January's payroll change was upwardly revised to 233,000 from the 166,000 previously reported, and February's job growth totaled 468,000, up from the 379,000 previously reported.
"It wasn't just the March jobs number that impressed, as January and February saw big revisions higher as well," Ryan Detrick, chief market strategist for LPL Financial, said in an email Friday morning. "This is about as clear as it gets, the reopening is happening faster than nearly anyone expected."
Growth in service sector employment again comprised the biggest contributor to the monthly payrolls increase. Some of the most badly beaten down areas of the service economy made strides in recovering lost jobs in March, reflecting easing social distancing restrictions and increased capacity limits at bars, restaurants and other establishments. Leisure and hospitality payrolls rose by 280,000 in March after an upwardly revised gain of 384,000 in February. However, these industries remain more than 3 million payrolls short of their pre-pandemic levels, representing the hardest-hit industry category tracked by the Bureau of Labor Statistics.
Still, some other areas also contributed notably to the March payroll gain. Within the private service sector, education and health services positions rose by 101,000 to nearly double their February gain, and transportation and warehousing jobs rose by almost 50,000. Retail trade jobs rose by 22,500 for a third straight monthly gain, and professional and business service jobs also posted a third consecutive monthly increase, with payrolls climbing by 66,000.
The private goods-producing sector also added back jobs on net in March after shedding payrolls in February as inclement weather impacted hiring. Construction jobs rose by 110,000 after declining by 56,000 a month earlier. The gain of 53,000 manufacturing payrolls in March nearly tripled these industries' February job gains.