(Reuters) - U.S. employment increased solidly in March and wages rebounded, signs of economic resilience that could allow a cautious Federal Reserve to gradually raise interest rates this year.
KEY POINTS:
* Nonfarm payrolls increased 215,000 last month, the Labor Department said on Friday. Data for January and February was revised slightly down to show 1,000 fewer jobs created than previously reported.
* Average hourly earnings increased seven cents. While the unemployment rate rose to 5.0 percent from an eight-year low of 4.9 percent, it was because more Americans continued to return to the labor force, a sign of confidence in the jobs market.
* The labor market has largely shrugged off slowing global economic growth, a robust U.S. dollar that has hurt manufacturing exports, and cheap oil prices, which have hit energy sector profitability.
COMMENTS:
BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST AT WELLS FARGO FUNDS MANAGEMENT IN MENOMONEE FALLS, WISCONSIN:
“The employment situation report was bittersweet. The headline payroll number was very good, as was the improvement in the labor force participation rate. The decline in durable goods manufacturing jobs and the move lower for the average manufacturing workweek were not positive signs.
"They highlight the labor market vulnerability that’s probably keeping Chair Yellen up at night. There is too great a risk to moving too quickly as the Fed doesn’t want the dollar to skyrocket, further damaging the manufacturing sector. The slight move up in the unemployment rate should ease the pressure to hike.”
MICHAEL ARONE, CHIEF INVESTMENT STRATEGIST, STATE STREET GLOBAL ADVISORS, BOSTON, MASSACHUSETTS:
“I’m not sure that the market is going to react too strongly to today’s number. The number itself, it’s a good employment report. It came in north of 200,000 about in line with expectations. So over all a very good report. It seems like Yellen’s speech at the Economic Club of New York took April clearly off the table, certainly we have a low expectation for a rate rise in June. I’m not sure the market is expecting this jobs report will have a major impact on the Fed’s decision, at least in the near term.
The unemployment rate “actually ticked up for good reason. The participation rate increased modestly, so that just means more people are coming back to the labor force and that’s a good sign. The participation rate ticked up, which is good news. More people are confident, they’re entering the workforce, more people are coming back. That’s great. As a result you saw a pick-up in the unemployment rate because of that. More people are competing for jobs, that’s what you’re seeing.”