MARCH JOBS REPORT - LOOKING BENEATH THE SURFACE

The March jobs report showed another beat against the expectations, registering 215,000 new jobs vs the expected 210,000 jobs. Average hourly earning increased 0.3%. However, unemployment ticked up to 5.0%.

Here's the breakdown from Zero Hedge.

Again minimum wage jobs stole the limelight, representing 64.6% of the overall jobs growth:

1) Education and Health 51,000
2) Retail and Trade 48,000
3) leisure and Hospitality 40,000

On the other hand higher paid manufacturing and mining jobs continued too fall, registering -29,000 and -12,000 jobs respectively. However, construction jobs gained, offset the fall with a gain of 37,000 jobs

Source: Zero Hedge


Attention needs to be drawn to the retail jobs as several hundred malls across the country will be closed in the ensuing months. I would expect the retails jobs growth to fall in the near future as retail sales has been far from impressive, as shown by this chart:

Source: www.tradingeconomic.com



As can be seen form the chart, retails sales have fallen since achieving a high in April 2015.

Retail sales and other forms of consumer consumption will likely to deteriorate in the future as income growth expectations have fallen, according to the University of Michigan survey (see chart below):

Source: Zero Hedge


So having growth in minimum wage jobs while on the surface looks good, will do little to boost consumption as majority of the income form minimum wage earners goes to healthcare and rent, the costs of which have risen lately.

The economic picture does not seem bright at this junction and it pays to follow the development of several key data such the PMI for manufacturing and services, sales to inventories and durable goods order orders for positive indications.