Main points:
Event: the United States released the latest employment data in March. Among them, 431000 new non-agricultural employees were added, slightly lower than market expectations; The labor participation rate was 62.4%, in line with market expectations; The unemployment rate was 3.6%, and the average hourly salary increased by 5.6% year-on-year, both exceeding market expectations.
Core conclusions:
1. March non farm data show that the US labor market continues to improve, and strong employment may prompt the fed to act faster. The number of new non-agricultural employment in March was 431000, which was lower than that of 678000 in the previous month, but it was revised up from 481000 to 504000 in January and 678000 to 750000 in February. There was a significant upward revision of 95000 in two months, and the average number of employment in the past three months reached 614000. The unemployment rate further fell to 3.6% from 3.8% last month, exceeding the market expectation of 3.7%, just one step away from the full employment level of 3.5% before the epidemic. The labor participation rate was 62.4%, a slight increase of 0.1% over the previous month. Among them, the hourly salary increased by 0.4% month on month, in line with expectations, with a year-on-year increase of 5.6%, exceeding market expectations. Overall, employment in the United States is still recovering strongly. The continuous revision of employment data, the continuous decline of unemployment rate and the higher than expected rise of wages show that the relationship between supply and demand in the labor market is still tense. In this case, superimposed on the deteriorating inflation outlook, the Fed may carry out monetary tightening faster.
\u3000\u30002. Specifically, the new non-agricultural employment in March was mainly contributed by leisure and hotel industry, professional and commercial services, health care and retail industry, accounting for 73.3%, indicating that the service consumption in the United States is gradually returning to the historical average. The indicators of unemployment rate and labor participation rate have been further improved, and the employment situation of women has improved. The salary growth rate exceeded expectations. The hourly salary increase of leisure and hotel industry was higher than that of the overall salary growth, and the "wage inflation spiral" continued to deduce.
1) from the perspective of sub industries, the main industries that added non-agricultural employment in March are: 112000 new jobs in leisure and hotel industry, 102000 new jobs in professional and commercial services, 53000 new jobs in medical care, 49000 new jobs in retail industry, and a total of 316000 new jobs in four items, accounting for 73.3% of all new non-agricultural employment, contributing to the vast majority of new jobs. Others with more new jobs were manufacturing (38000 new) and construction (19000 new), while transportation, warehousing and information industry showed negative growth. From the perspective of the industry, the composition of the new employment industry is similar to that in February. With the gradual relaxation of epidemic control in the United States, "coexistence with the virus" has become the norm in most parts of the United States. The consumption of services such as leisure and hotel industry has continued to recover, driving the continuous increase of relevant employment. Among them, catering services and accommodation have increased by 61000 and 25000 respectively, with a large increase. The sustained and rapid increase in employment related to service consumption shows that the US service consumption hit by the epidemic is gradually recovering to the historical average level. With the gradual decline of the epidemic, the employment related to follow-up services is expected to continue to increase and become an important part of the new employment in the United States.
2) the unemployment rate has further decreased and the employment situation of women has improved. In March, the unemployment rate further fell to 3.6%, exceeding the market expectation of 3.7%, which has been reduced for three consecutive months, only one step away from the 3.5% level before the epidemic. Considering the tense relationship between supply and demand in the current job market, it may reach or even lower than 3.5% in April. In terms of labor participation rate, the data in March was 62.4%, a slight increase from 62.3% in February, driving the overall employment rate of the United States to 60.1%, an increase of 0.2% from the previous month. Structurally, the unemployment rate of adult women fell to 3.3% this month, down from 3.6% last month. At the same time, the labor participation rate of women over 20 reached 58.2%, the best level since the outbreak of the epidemic. In comparison, the unemployment rate and labor participation rate of men in March were 3.4% and 70.5% respectively, with less improvement. The further reduction of the unemployment rate and the recovery of the labor participation rate may be due to the continuous improvement of the wage level to attract the relevant labor force to re employment, on the other hand, the savings of American residents are decreasing, and the continuous improvement of inflation has accelerated this situation. The improvement of female employment shows that Americans who left their jobs due to the epidemic are gradually returning to the job market, and the labor participation rate in the United States will increase slowly in the future.
3) the salary growth exceeded the expectation, and the "wage price spiral" continued to deduce. The average hourly salary in March was US $31.73, an increase of 5.6% year-on-year, exceeding the market expectation and an increase of 0.4% month on month, in line with the market expectation. Last month, the growth rate of hourly salary increased by 0.1% month on month, and the average working hours per week fell slightly to 34.6 hours from 34.7 hours last month. The "wage price spiral" continues to be deduced. From the perspective of employment structure and salary structure, although the average hourly salary of the leisure and hotel industry with more new jobs is still low compared with other industries, it increased by 1.18% month on month and 11.82% year-on-year, which is higher than the overall salary growth. Considering that the leisure and hotel industry accounts for more than 25% of the new employment and the tight labor supply and demand situation in the industry, the subsequent "wage inflation spiral" pressure will further increase.
\u3000\u30003. This month's data show that the current U.S. employment has not only continued to recover in quantity, but also improved in employment structure, which has reached the Federal Reserve's setting of full employment. At present, the inflation level in the United States remains high, and it is expected to continue to rise in the future, and the decline rate is slow. In addition, the further fermentation of the "wage inflation spiral" may prompt the Federal Reserve to raise interest rates by 50bp at the May meeting, and the contraction is expected to proceed faster. Compared with before the epidemic, the current labor market gap in the United States is less than 1.6 million. According to the current employment level, the gap will be closed soon. The continuous recovery of employment, the improvement of employment structure and the rapid increase of wage growth have changed the Fed's judgment on the labor market. Powell said in his latest speech that the employment improvement rate is much faster than expected, the nominal wage is increasing at the fastest rate in decades, and the US labor market is very strong and extremely tense, which is even more tense than before the epidemic. In February, US inflation reached a new high of 7.9%. Affected by the conflict between Russia and Ukraine, US inflation is expected to continue to rise and fall slowly, which further worsens the inflation outlook. It is expected that the rate hike of the Fed will be faster than that of the next 50bp meeting in May.
Risk tips
International tensions triggered higher than expected inflation, and the covid-19 epidemic situation deteriorated significantly.
