The seasonally adjusted unemployment rate receded to 3.7% in March from its February high (February: 3.9%; January: 3.4%), in line with expectations.
On a seasonally adjusted basis, the improvement was partly helped by a 186k (2014 monthly average: 46k) drop in the labour force, which paid back a larger increase in February (+249k). In turn, this was mainly due to a 124k drop in employed workers, which reversed the 126k increase in February.
Nonfarm private sector jobs bore the brunt of the decline in March falling 165k, the largest drop since October 2011 (February: +158k; January: 46k). Looking through these distortions, the data reflects frictional changes in the labour market.
Broadly, the labour market is starting to absorb the surge in job seekers - and releasing part time hires that emerged immediately after the graduation season.
The timing of the Lunar New Year holiday, which was celebrated in late February this year, meant that many school leavers decided to take up new permanent job offers only in March and April.
"We think the drop in the participation rate to 62.6% in March (February: 63.1%; January: 62.2%) is likely to be a pause. We expect participation to increase as the government's three-year plan for economic innovation aimed at rejuvenating the hiring potential in key services industries starts to bear fruit", Said Barclays in a report on Wednesday
