March Jobs Report: Continued Strength

The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Lead Economist Daniel Zhao.

The March jobs report shows a job market that remains on solid footing. The job market continues to beat back fears of deterioration as jobs growth and unemployment stabilizes combined with cooling wage growth gives the Federal Reserve more runway to get inflation down and achieve the soft landing.

Key stats:

Are white-collar industries back yet?

Traditionally “white-collar” industries like finance, professional & business services and information contributed little to jobs growth in March, adding just 10,000 jobs collectively. Instead, job gains have been driven primarily by more recession-resistant industries like healthcare, education and government.

The continued weakness in these sectors may help explain poor economic sentiment. These sectors tend to dominate headlines as layoffs at consulting, finance and tech giants get more attention than layoffs at small businesses particularly in industries like retail, food services or transportation, which account for a much larger share of layoffs across the economy.

How worried should we be about the spike in the Black unemployment rate?

The Black unemployment rate spiked to 6.4%, the highest rate since August 2022. While no rise in unemployment rates should be ignored, this is a useful reminder of how volatile month-to-month data can be especially for demographic groups that make up a smaller share of the survey respondents. For example, Asian unemployment also dropped precipitously in March, falling to 2.5%.

In fact, CPS survey response rates were just 67.2% in March, the lowest level since July 2020 when the pandemic was still in full swing. The spike in Black unemployment (and drop in Asian unemployment) may be the result of statistical noise. It would be prudent to see if the higher unemployment rate is repeated in April before declaring this the start of a new trend.

Is the job market starting to reaccelerate?

Payroll employment grew 303,000 in March, the fastest monthly pace since May 2023 and growth so far in 2024 has averaged 276,333 jobs a month, up 212,833 in the second half of 2023. However, it seems premature to declare a reacceleration in the job market rather than stabilization.

The February JOLTS report released earlier this week told a similar story with hires and quits rates stabilizing after several months of deterioration, though they remain below 2019 levels. Other data like Glassdoor Employee Confidence Index point to soft worker sentiment even as headline job market indicators remain solid.

The job market seems stable if not overly stable. Despite headlines, layoffs remain low which is good for job security but this has also been paired with low hires and quits rates. As employers and workers alike are hesitant to make moves, lower layoffs, lower hires and lower quits result in less mobility. This can still support solid net jobs growth at the topline but with less churn beneath the surface.

Less mobility means less opportunities to climb the career ladder or earn a raise, which may explain why Americans remain sour on the job market. Additionally, the job market is like a game of musical chairs and if everybody sits tight, there are fewer opportunities for new or returning workers to find a seat. While headline job market indicators remain strong, a more substantial revitalization of job mobility may be necessary to improve worker sentiment.