The United States Labor Department has an interesting job. Once a month, the department announces numerous statistics on the American job market, from the number of jobs created to the unemployment rate. They get these figures through polling, government agencies, and numerous other sources to get the most accurate data. (Their announcement can have a major impact on the stock market, so accuracy is a must.)
For the last two months, the American economy added hundreds of thousands of jobs. This made President Trump happy, who took credit for the job growth despite having just landed in office. This also made Wall Street happy, as it showed signs of economic growth. (Wall Street L-O-V-E-S economic growth.)
Today, however, the Labor Department announced their March jobs report, and it was not as great as economists expected. Instead of seeing 180,000 new American jobs as expected, only 98,000 jobs were added last month. How did this significant decrease in American jobs happen, and what does it mean for the economy?
Retail sucks right now.
Retail stores are closing thousands of locations right now. The retail industry lost 30,000 jobs alone, and that number will likely increase as more stores close and companies go out of business. Fewer people are going to physical stores, opting to shop online instead. As online shopping increases, the health of the retail sector will decrease and put a damper on future jobs reports.
The weather was terrible.
Many states were hit with heavy snow storms and inclement weather in March. Terrible weather like this could slow down hiring, especially as businesses lose customers, cut hours, or shut down due to snowy conditions. This is something economists often factor into their analysis during particularly awful winters.
Trump mandated a hiring freeze.
President Donald Trump mandated a hiring freeze on civilian government positions. Any empty federal government positions in the last month were not filled. If this decision were reversed, it would have added thousands of jobs to the American economy.
Is there any good news?
Unemployment in March decreased from 4.7% to 4.5%, the lowest it’s been since May of 2007. While 0% unemployment is theoretically impossible, the unemployment rate has dropped as of recent. It shows signs of continuously dropping in the near future.
Small businesses also added 118,000 jobs. This proves that the small business sector is growing. While this might not appear to jive with the “98,000 jobs added” figure, it’s worth noting that the final jobs number is calculated by adding jobs gained with jobs lost.
It’s also worth noting that hourly earnings are up 2.7% compared to a year ago. U.S. workers earning hourly wages make approximately 68 cents more than they did last year (though this isn’t true for everyone).
What does this mean for the stock market?
Slowed job growth means more economic worry. This already lead to a slight decline in the value of stock indexes today, as investors are a tad less positive about economic growth. Yet the market is influenced by many things. One piece of good news to cancel out today’s bad could send those indexes back up.