March was a month of giving back: after a very strong, if downward revised start to the year, with both January and February payrolls revised lower by a total of 38,000 jobs, March saw the worst job gains since May 2016, with only 98,000 jobs added. This is where they came from:
While most job sectors performed in line with recent trends, there were three major outliers: growth in the Education and Health jobs category tumbled from +66K to +16K; Construction jobs dropped from +59K to +6K, while the big detractor was Retail Trade, where for the second month in a row, 30K jobs were lost.
A smaller, if perhaps more painful to Donald Trump, drop was experienced in the manufacturing sector, where last month’s gain of 26K jobs was revised to just 11K. According to SouthBay Research, the supply chain is still waiting for real demand, and now that the destocking/restocking wave over, factories are waiting for new demand to emerge. He notes that there will be no hiring without order momentum, which means that the manufacturing economy euphoria has indeed stalled and is now manifesting itself in poor job numbers. This is how Southbay puts it:
Possible over-stocking creating additional drag: many companies bought into the Trump rhetoric and kicked-off production early in the quarter, only to slow again as that demand has yet to materialize
The one bright category was Professional and Business Services, where March saw an increase in monthly payrolls from 27.1K to 45.5K, however of this the biggest category was the odd “Services to buildings and dwellings”, i.e. Doormen and Supers.
Finally, everyone’s favorite job category, waiters and bartenders, aka “Food services and drinking places” leisure workers, continued their relentless rise, adding another 21.7K jobs in March.
The complete breakdown of changes in key job categories in February and March is shown in the chart below.