April 3, 2026

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.Payroll employment surged by 178 thousand in March which was a far larger increase than had been expected.  However, it follows a presumably weather-related drop of 133 thousand in February and hiring simply rebounded in March.  In the past three months payroll employment has risen on average by 68 thousand per month   .While volatile on a month-to-month basis it appears that jobs are still being created by a modest amount each month.

In addition to hiring workers employers can also alter the length of the workweek for their existing workers.  The nonfarm workweek declined 0.1 hour in March to 34.2 hours after having been unchanged in February.  The workweek has been alternating between 34.2 and 34.3 hours for the past two years.  Furthermore, prior to the recession the nonfarm workweek was averaging 34.4 hours so it is currently just a snitch shorter than it was six years ago.

Uncertainty about tariffs and the availability of immigrant workers has altered hiring decisions to some extent.  Firms in many cases are not replacing a worker that leaves the company and are thereby reducing headcount by attrition.  Firms are also using artificial intelligence to fill some of the need for some types of jobs.  But they are not yet prepared to actually lay off workers as initial unemployment claims (a measure of layoffs) has been fairly steady.  It is not yet signaling any particular softening of the labor market.

Job openings have fallen from a record high level of 11.7 million in early 2021 to 6.9 million.  Prior to the recession there were about 7.0 million job openings per month versus 6.9 million currently. Today there are still 0.9 job openings for every unemployed worker which is just slightly lower than where this was prior to the recession (1.1).  Employers are nervous and are responding by slowing employment growth via attrition and by shortening the workweek.  The labor market has weakened a bit, but for now it is holding rather steady.

Finallly, the employment reading for the purchasing manager’s manufacturing and non-manufacturing surveys has actually risen somewhat in the past few months.

The change in employment and hours worked are reflected in the aggregate hours index which declined 0.2 in March to 116.2 after having fallen 0.1 in February.  The aggregate hours increasd 0.9% in the first quarter which when combined with a moderate increase in productivity suggests GDP growth in the first quarter of something around the 2.2% mark.  The economy continues to cruise along at a moderate pace for now, but the wildcard is what happens next with the war.

Construction employment rose 26 thousand.   Manufacturing employment increased by 15 thousand.  Retail trade jobs rose 10 thousand.  Transportation and warehousing gained 21 thousand.  Info tech jobs fell 3 thousand.  Financial sector jobs fell by 15 thousand.  Professional and business service sector employment rose 2 thousand.  Health care jumped by 76 thousand as the result of the end of a physicians strike.  Jobs in social assistance rose 14 thousand.  Jobs in the leisure and hospitality industry climbed by 44 thousand.  Government jobs declined 8 thousand. (Federal government employment dropped by 18  thousand in March.)

GDP rose 1.4% in the fourth quarter, we expect 2.2% in the first quarter.

Stephen Slifer

NumberNomics

Charleston, S.C.