Unemployment rose slightly for reasons that counterintuitively reassured job market watchers, while layoffs increased, but remained in safe territory. Meanwhile, residential construction spending was up.
The unemployment rate went up in March, growing from 4.9 percent to 5 percent, according to last week’s report from the Bureau of Labor Statistics. That said, job market watchers weren’t overly concerned because the economy added 215,000 jobs. A rise in the rate, as well as more jobs, was indicative of new entrants to the job market.
“The unemployment rate can tick up for two reasons: One is weak jobs, and the other is more people coming back into the labor force,” IHS Chief Economist Nariman Behravesh told PBS Newshour
Additionally, earnings notched up in March, with nonfarm payrolls increasing by 7 cents over February to $25.43. Compared to March 2015, average hourly earnings rose by 2.3 percent.
The labor force participation rate — the percentage of employable Americans either with work or actively looking for work — was at 63 percent, which was up 0.6 percent from September. The number of Americans unemployed for 27 weeks or longer — the long-term unemployed — continued to hover at 2.2 million.
Initial Jobless Claims
In more recent employment news, first-time claims for unemployment benefits filed by the newly laid-off during the week ending March 26, grew to 276,000, an increase of 11,000 claims over the prior week’s total of 265,000, the Employment and Training Administration reported last week. Claims have been below the 300,000-claim mark for 56 weeks, which is the longest sub-300,000 streak since 1973.
“Claims are still low — just given normal volatility, it’s not much of a change,” Jim O’Sullivan, chief U.S. economist for High-Frequency Economics Ltd., told the Bloomberg news service. “The overall takeaway is that claims remain low which is consistent with no letup in labor market improvement.”
The four-week moving average — considered a more stable measure of layoff activity — ticked up to 263,250, which was 3,500 claims up from the preceding week’s average of 259,750.
Construction dropped to an annual rate of $1.14 trillion in February, which was 0.5 percent below January’s pace of $1.15 trillion, according to last week’s report from the Census Bureau. That said when compared annually February’s spending was 10.3 percent higher than February 2015’s rate of $1.03 trillion.
Spending on private construction notched down to an annual rate of $846.2 billion, which was 0.1 percent lower than January’s pace of $847.2 billion. Reassuringly, residential construction grew to an annual rate of $447.9 billion in February, which was 0.9 percent over January’s rate of $443.8 billion.
The increased spending indicates that the housing sector is continuing to push for increased inventory in order to keep home prices in check and drive volume as a result.
This week we can expect:
- Monday — Factory orders for February from the Census Bureau.
- Tuesday — Balance of trade for February from the Census Bureau and the Bureau of Economic Analysis.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; Consumer credit for February from the Federal Reserve.
- Friday — Wholesale inventories for February from the Census Bureau.
Written By Summit Mortgage Corporation located in Lakewood, Colorado