Output isn’t growing that quickly in the US economy, but don’t tell that to employers, who just keep on hiring. March saw an on-trend again of 215K with no material revisions, and the one-tick rise in the jobless rate to 5.0% only reflected higher participation, as the household survey also registered strong job gains. Wages, which disappointed last month, were revised higher to a 2.3% growth rate in February, and held that pace in March on a decent 0.3% bounce back in monthly gains. Factories continued to pare back workers in line with recent softness in the goods sector, but services job gains were broadly based. Aggregate working hours grew nearly at a 2% annualized pace in Q1, so this was another quarter with negative productivity if there are no revisions to the monthly growth figures that contribute to GDP. We see the healthy hiring trend as a sign that businesses expect growth to pick up in the coming quarter.
Overall, not a big surprise vs. consensus, but a refreshing change from recent disappointments, and healthy enough to support a June rate hike if early Q2 GDP indicators look better.
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