click below to login to your secure account
By Scott McIntyre, CFA
Co-Head of Investment Management
HilltopSecurities Asset Management
U.S. companies added +178k jobs last month, well above the +65k median forecast. At the same time, the February payroll contraction was revised lower from -92k to -133k. Although at first glance, it might appear that business hiring surged in March, the more appropriate explanation is that February was understated by striking healthcare workers and inclement weather. Both factors reversed themselves the following month. Thus, the best way to gauge labor conditions in the establishment survey is to simply average February and March, showing a rather tepid net monthly gain of +22.5k, equaling the 12-month average.
The effect of the Kaiser strike was evident in an increase of +76k healthcare workers in March after a -28k February decline. Apparent weather-related bounces showed up in leisure and hospitality (+44k), construction (+26k) and retail trade (+10k). The manufacturing sector added +15k jobs in March, the most since the end of 2023, another indication that factory activity may finally be picking up.
White collar sectors continue to struggle as financial activities (-15k) and information technology (-2k) both declined, while the broad category of business and professional services logged a tiny +2K increase.
In the separate household survey, the headline unemployment rate fell from 4.44% to 4.26% as the number of unemployed jobseekers declined by -332k to 7.239 million while the labor force shrunk by -396k workers to 170.1 million. The labor force reduction pushed the participation rate down to 61.9%, the lowest since November 2021. Thus, one of the underlying reasons why the unemployment rate is so low is that there are fewer Americans seeking work.
The headline numbers from this morning’s BLS report imply a strengthening labor market, although March payroll strength has to be weighed alongside the February weakness, while the lower unemployment rate should be viewed in the context of fewer jobseekers.
Bond yields are slightly higher in early trading, reflecting the probability that apparent improvement in labor conditions will allow policymakers to hold rates steady for longer. However, geopolitics will continue to drive the financial markets for the foreseeable future.
The stock market is closed for Good Friday holiday and the bond market will close early.
Happy Easter.
About Scott McIntyre, CFA
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Scott McIntyre specializes in investment management services and is responsible for the management, oversight and trade supervision of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Scott also provides investment advice and consulting, reviews local government investment policies, formulates overall investment strategies, evaluates account performance and oversees the day-to-day operations. He is a member of the Chartered Financial Analyst (CFA) Institute and a CFA Charterholder, a two-term advisor to the GFOA Treasury and Investment Management (TIM) committee, a Registered Investment Advisor, and holds FINRA Series 7, 24, 63, and 65 licenses.
About Greg Warner, CTP
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Greg Warner specializes in investment management services and is responsible for the management and oversight of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Greg coordinates all client services and portfolio management duties, including security evaluation and portfolio analysis, trading, investment reporting, board presentations, and monitoring of broker-dealer relationships. He is an advisory committee member to the Texas Association of Counties, a member of the Government Treasurers’ Organization of Texas (GTOT), a Registered Investment Advisor, a Certified Treasury Professional (CTP) and holds FINRA Series 7, 63, and 65 licenses.
About Matt Harris, CFA
As HilltopSecurities Asset Management’s Senior Portfolio Advisor, Matt Harris specializes in investment management services for public sector municipal clients. He developed his experience in the banking industry, supporting balance sheet management, interest rate risk analysis, liquidity planning, and investment strategy implementation. At HilltopSecurities, he works closely with clients to develop and implement customized investment strategies, oversees account documentation and reporting, and assists clients with the public funds depository review process, including competitive RFP evaluations. Harris is a member of the CFA Institute and a CFA Charterholder, a Registered Investment Advisor, and holds FINRA Series 7, 63, and 66 licenses.
The paper/commentary was prepared by HilltopSecurities (HTS). It is intended for informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of HTS as of the date of the document and may differ from the views of other divisions/departments of Hilltop Securities Inc. and its affiliates. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance. This material has not been prepared in accordance with the guidelines or requirements to promote investment research, it is not a research report and is not intended as such. Sources available upon request.
Hilltop Securities Inc. is a registered broker-dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. HTS is a wholly owned subsidiary of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas, Texas 75201, (214) 859-1800, 833-4HILLTOP.
