And so the confusion remains: why did Yellen go uber dove three days ahead of a day in which the BLS reported that in March not only were 215K jobs created, more than the consensus 205K, if below last month's 245K, but in which average hourly earnings rebounded a solid 0.3%, above the 0.2% expected, and well above last month's -0.1% decline.
Payrolls:
Wages:
However, the fly in the the ointment was that the unemployment rate picked up modestly from 4.9% to an above expectations 5.0%. This was due to a modest increase in the participation rate to 63% from 62.9%, as 396K new civilians entered the labor force, rising to 159,286K, while 246K new jobs were added (per the Household survey) while people not in the labor force declined by 206K to 93,482K.
Elsewhere manufacturing payrolls dropped 29K, far below the 2K increase expected, and below last month's -18K. Additionally, the energy recession is finally trickling down with oil and gas extraction payrolls falling 19,200 from a year earlier (chart courtesy of @not_jim_cramer).
And the last notable point: average hourly hours worked remained at flat at 2 year lows of 34.6, which bodes poorfly for both productivity growth and for GDP.
On net, the report was better than expected, which means it is "good news" if only for the economy, but will it be good news for the market, which will now start discounting another Fed rate hike all over again.
Indeed, the speculation has already begun that June is once again in play as per Bill Gross, who moments ago said that "June Likely to Be When Fed Makes One of Two Rate Hikes."
As of this moment, futures are near day lows, so Goldman's latest forecast that "Good news is good news again" was again wrong.
From the report:
Total nonfarm payroll employment rose by 215,000 in March. Employment gains occurred in retail trade, construction, and health care, while job losses occurred in manufacturing and mining.
Retail trade added 48,000 jobs in March. Employment gains occurred in general merchandise stores (+12,000), health and personal care stores (+10,000), building material and garden supply stores (+10,000), and automobile dealers (+5,000). Over the past 12 months, retail trade has added 378,000 jobs.
Construction employment rose by 37,000 in March. Job gains occurred among residential specialty trade contractors (+12,000) and in heavy and civilengineering construction (+11,000). Over the year, construction has added 301,000 jobs.
Employment in health care increased by 37,000 over the month, about in line with the average monthly gain over the prior 12 months. In March, employment rose in ambulatory health care services (+27,000) and hospitals (+10,000). Over the year, health care employment has increased by 503,000.
Over the month, employment continued to trend up in food services and drinking places (+25,000) and in financial activities (+15,000).
In March, employment in professional and business services changed little for the third month in a row. In 2015, the industry added an average of 52,000 jobs per month.
Employment in manufacturing declined by 29,000 in March. Most of the job losses occurred in durable goods industries (-24,000), including machinery (-7,000), primary metals (-3,000), and semiconductors and electronic components (-3,000).
Mining employment continued to decline in March (-12,000) with losses concentrated in support activities for mining (-10,000). Since reaching a peak in September 2014, employment in mining has decreased by 185,000.
Employment in other major industries, including wholesale trade, transportation and warehousing, information, and government, changed little over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in March. The manufacturing workweek edged down by 0.1 hour to 40.6 hours. Factory overtime was 3.3 hours for the fourth month in a row. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)
In March, average hourly earnings for all employees on private nonfarm payrolls increased by 7 cents to $25.43, following a 2-cent decline in February. Over the year, average hourly earnings have risen by 2.3 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.37. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for January was revised from +172,000 to +168,000, and the change for February was revised from +242,000 to +245,000. With these revisions, employment gains in January and February combined were 1,000 less than previously reported. Over the past 3 months, job gains have averaged 209,000 per month.