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March Jobs Growth Slows as Consumer Confidence Improves

In the U.S., nonfarm payrolls grew by 431,000 in March, while consumer confidence inched up slightly.

Job growth

The economy added 431,000 jobs in March, missing economists’ consensus estimate of 490,000 and marking a slowdown from February’s 750,000-job expansion for a 3.6 percent unemployment rate.

Most March job gains were in leisure and hospitality, although retail trade increased by 49,000 jobs, according to the U.S. Department of Labor. That’s an improvement from the February’s 37,000. Within retail trade, gains in general merchandise stores rose by 20,000. Total retail trade employment is 278,000 above February 2020. The average hourly earnings rose 0.4 percent.

Consumer confidence for March

The Conference Board’s Consumer Confidence Index rose slightly in March to 107.2, up from 105.7 in February. Although January and February readings reflected a decline in confidence, consumers appeared buoyed somewhat by strength on the jobs front. The Present Situation Index rose to 153.0 from 143.0 in February. However, the Expectations Index measuring short-term outlook fell to 76.6 from 80.8, reflecting inflationary concerns and higher gas prices, as well as the war in Ukraine.

“Nevertheless, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months reaching 7.9 percent—an all-time high. However, these headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead,” Lynn Franco, senior director of Economic Indicators at The Conference Board, said.

More than half of consumers (57.2 percent) said jobs were “plentiful,” up from 53.5 percent in February and representing a new historical high. However, respondents to The Conference Board’s survey weren’t as optimistic about their outlook for short-term business conditions, with 23.8 percent expecting a decline, up from 19.9 percent in February.

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Jack Kleinhenz, chief economist for the National Retail Federation, wrote in the retail trade group’s April Monthly Economic Review that the U.S. economy is showing “strong momentum,” though consumers are now preoccupied with inflation Russia’s war in Ukraine where Covid had been top of mind.

“Complicating the picture is the very high uncertainty associated with the war in Ukraine and its effect on the world economy,” Kleinhenz said. “While the United States has a limited trade link with Russia, the war continues to overshadow economic news and could have a potentially serious effect on prices for energy and commodities, adding to inflation concerns. The bottom line is that there are just as many uncertainties weighing on the outlook for growth as there were a year ago even if some of the forces at play have changed.”

Kleinhenz expects gross domestic product growth of 3.5 percent this year, and NRF forecasted annual retail sales growth of 6 percent to 8 percent, or $4.86 trillion to $4.95 trillion.