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The S&P 500, tracked by the C Fund, had a decent gain last week and is now less than 2% away from all-time highs from six months ago

Lyn Alden

A reasonably strong jobs report for the month of March came out on Friday, showing 196,000 new jobs compared to the previous month.

This jobs report was particularly important for a lot of analysts because the February report showed a shockingly small job gain. It was so low that many economists and analysts wondered if it was just a blip in the data, possibly related to the government shutdown or other inconsistencies. A lot of eyes were watching this next one in March to see if the country would have another low number, confirming a downtrend, or if it would go back up to normal and support the notion that February’s data was a blip.

Overall, this is considered a solid jobs report, and the following chart shows how this month compares to other months over the past two years:

Nonfarm Payroll Month-Over-Month Change:

Chart Source: BLS March Jobs Report

The official unemployment rate remained unchanged at 3.8%. For people over age 25 with a bachelor’s degree or higher, the number is even lower at 2.0%.

The data show that not all sectors are benefiting equally, and there’s a growing divide between the strongest sectors and the weakest ones.

Healthcare and professional technical/business services saw the biggest increases this month while the retail industry lost more than 11,000 jobs. Looking back over the past three years, we can see that this has been a longer-term trend. The retail industry has been in decline since 2017:

Chart Source: CNBC, referencing BLS data

The transportation and warehousing sector is benefiting from the growth of online retail. The healthcare sector is benefiting from aging demographics, with more and more members of the baby boomer generation retiring. It’s also benefiting from the fact that the United States has the highest per-capita spending on healthcare of any country in the world and that healthcare spending is growing as a percentage of GDP.

Retail has been the worst sector, as store closures continue to hit major brands, and increased deployment of automated self-checkout systems displace a portion of cashiers.

The manufacturing sector has been underperforming the average but has been in a mild uptrend until recently. The latest couple of months have been flattening, and this month saw a 6,000 job decline, but it’s too quick to have a solid conclusion. One particular area that many analysts are turning bearish on is the auto sector. Sales of consumer vehicles seem to have peaked for this business cycle and may be entering a downtrend:

Chart Source: St. Louis Fed referencing BEA data

Nearly ten years into an economic expansion, with growth slowing and the yield curve flat, many economists and analysts are looking at monthly reports closely to see how this business cycle is progressing. If the March job report published Friday had been negative, it could have pulled down markets with more slowdown concerns. But since the report was solid, the market remained satisfied for now.

The S&P 500, tracked by the C Fund, had a decent gain last week and is now less than 2% away from all-time highs from six months ago:

Chart Source: Google Finance

Lyn Alden is a financial writer and an engineer, and holds a bachelor’s in engineering and a master’s in engineering management, with a focus on financial modeling and resource management. She specializes in analyzing and presenting financial data. Her investment work can be found on LynAlden.com.