Today’s strong jobs report should help the market sustain its positive momentum of the last two weeks. Driving this market turnaround has been the realization that the U.S. economic recovery was on firmer footing and more than capable of withstanding the emerging challenges. Stocks will find today’s other report, the ISM Manufacturing Index, reassuring of the recovery’s staying power.
But the day’s focus will remain firmly on the better-than-expected non-farm payroll report for March. A total of 216,000 jobs were created in March, reported the Bureau of Labor Statistics this morning. This compared to market expectations of 195,000 and the revised February tally of 194,000. The private sector created 230,000 in the month, offset partly by losses on the government side.
Other favorable aspects of the report include positive revisions to the prior two months’ tally and the unemployment rate edging lower to 8.8% from 8.9% last month. The unemployment rate has dropped a full percentage point in the last few months, by all means a very encouraging sign. Average hourly earnings and average work week remained unchanged in March.
The lack of adequate job creation has been the weakest link in the ongoing economic recovery, though a number of labor-market indicators have been showing signs of improvement. Jobless Claims, the employment components of the ISM Indices, and the ADP report have been showing labor-market improvement for months now.
Today’s report confirms all of those trends, reassuring the market that a labor-market turnaround is finally underway.