Steady improvements in labor market indicators suggest that the risk of a recession remains low, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Labor market indicators continued their steady improvement in March, according to figures released today by the Bureau of Labor Statistics. The economy added a net 215,000 jobs on a seasonally-adjusted basis in March, which represented the fifth time in the last six months with gains above 200,000.
Panning out a bit, the 628,000 net new jobs added during the first quarter is right on par with the average quarterly gains during the last four years. This illustrates just how steady – if unspectacular – the current expansion has been.
With the exception of the mining (-42,000) and manufacturing (-29,000) sectors, job growth was generally broad-based in the first quarter.
Retailers led the way in the first quarter, with a net gain of 181,000 jobs. The health care and social assistance sector added 146,000 jobs, while eating and drinking places added a net 88,000 jobs. The construction sector expanded payrolls by 75,000 in the first quarter, while the professional and business services industry added 61,000 jobs.
Although the unemployment rate ticked up to 5.0 percent in March, it was due largely to an increase in the labor force participation rate to 63.0 percent – the highest level in two years. This is a sign that more people are returning to the labor force to pursue a growing number of employment opportunities.
Another positive sign is that the employment-to-population ratio rose to 59.9 percent in March – the highest level since March 2009. It still remains well below pre-downturn levels, when it averaged nearly 63 percent during the five years prior to the Great Recession. But it continues to trend gradually in a positive direction.
All told, the steady improvements in labor market indicators suggest that economic fundamentals remain solid, and the threat of a recession is low.