The U.S. unemployment rate fell to its lowest level in four years, according to the latest employment report from the Bureau of Labor Statistics, which came as the professional and business services sector led the way in job creation.
The report found that the economy generated 88,000 new jobs in March, which was down from an exceptionally high reading in February, but still showed an employment increase for the 37th consecutive month. The biggest takeaway from the report was the continued decline of the nation's unemployment rate, which dropped to 7.6 percent, following a slide to 7.7 percent in February.
According to The New York Times, many economists are urging the public to consider the factors that go into these reports, and that one month of lower hiring activity - amid stretches of large additions to the workforce - shouldn't be enough to throw the economy off kilter. What's more, many experts say the number will almost certainly be revised.
"Remember that we've had a pattern of upward revisions," said John Ryding, the chief economist at RDQ Economics, pointing to the upward revision that was also reported for January and February's official jobs report. "Before we read too much into it, bear in mind we have at least two more cracks of the whip before the number is really finalized."
Contract staffing still going strong
One of the brightest spots of the employment report was the jump in professional and business services, which include contract staffing. Use of the contingent workforce "continued to trend up," the BLS noted.
Last month, employers in the professional and business services sector added 51,000 new jobs, bringing the 12-month total of jobs added to 533,000. In addition to contract staffing, the accounting and bookkeeping sector showed heavy hiring, adding 11,000 jobs in the month.
The rise in the number of contract jobs found in the country is in line with historic trends, in which employers turn to such workers instead of committing to a full-time hire. Diane Swonk, chief economist at Mesirow Financial, stated that more contract hiring means greater flexibility for employers, and that the contingent workforce is "rapidly approaching a new record" high.
Experts take note
Economists have focused on the increasing number of contract positions in the country, and have identified new trends that are favorable for staffing firms. According to a new report from Deutsche Bank Markets Research, demand for contract workers is rising right along with volumes.
In March, new contract jobs made up 23 percent of all positions added. This marks the highest penetration of contract positions in the workforce since June 2012 and a huge increase from the 11.1 percent average that has been recorded in the last 37 months. Since then, it appears many companies have been refraining from bringing on permanent workers in part because of the impending effects of the new healthcare law. This, however, has actually been a boon for contract staffing.
"So while we do not like the headline 88,000 jobs created, we think we understand one of the reasons behind it," Paul Ginocchio, research analyst at Deutsche Bank, wrote in the report. "This weak headline number combined with a strong [contract] number makes us feel good."
On the year, the number of contingent workers has now risen 6.8 percent, up from the 5.6 percent growth noted in February, and the 6.6 percent that was reported in January. March marked the sharpest rise in contract staffing since November, when such employment ticked up 7.4 percent.