March 2018 Jobs Report

The latest jobs report from the Bureau of Labor Statistics shows that 103,000 nonfarm jobs were added to the U.S. economy in March, with the largest gains in manufacturing, health care and mining. Economists were expecting a gain of 185,000 jobs, so this report missed the mark. However, after February’s extremely high report, the economy has still added an average of 200,000 jobs each month in 2018. March marked the 90th straight month of job growth, the longest streak on record. The unemployment rate also held at 4.1 percent. “The fundamentals still remain solid,” said Dan North, chief economist for Euler Hermes North America.

Wage growth inched up from February to 2.7 percent year-over-year, remaining slow. Economists are confounded by this, as it should be trending upward as unemployment remains low. While there are some possible reasons for the lack of wage growth, most economists still believe that employers will have to raise wages soon to attract and retain workers. It’s just not happening so far. “It’s a standoff, almost, on wages,” said Jason Guggisberg, a vice president at the staffing firm Adecco. “Who’s going to go first?”

Slower wage growth isn’t necessarily bad for the stock market, though. Workers want higher wages, but investors seem to be pleased with the current situation. As wages rise, so does the fear of inflation and rate hikes from the Federal Reserve. This was illustrated in January, when an unusually high spike in wage growth caused a major loss in the stock market. “Wage growth continues to inch higher but not enough to worry markets at this point,” said Quincy Krosby, chief market strategist at Prudential Financial.