Economy
07 April 2023
US job growth slows some in March, unemployment still low
The job market remains strong.

Photo by Eric Prouzet on Unsplash
The job market remains strong.

In March, job growth in the U.S. economy slowed somewhat from the prior two months, even as unemployment remained at historical lows.
Data from the U.S. Bureau of Labor Statistics for March 2023 showed the following:
The U.S. economy added 236,000 new jobs in March. The pace of job gains is slowing so far in 2023. The March total is below the 311,000 positions gained in February, and 504,000 added in January. It is also below the six-month average monthly gain of 334,000.
Retail jobs showed little change, as the sector lost 15,000 jobs. Even as furniture, electronics and appliances showed some losses, department stores continue to be a gainer, adding 15,000 jobs.
Unemployment edged down to 3.5%, falling only slightly from 3.6% in March. The unemployment rate continues to be little changed this year.
Average hourly earnings rose by 9 cents, or 0.3%, to $33.18. This brings the 12-month wage increase to 4.2%.
What it means for brands and retailers: The job market remains a key indicator of demand, and overall it is still rolling along. While there was a slowdown in job growth on the month, there are still signs of strength throughout the labor market. Unemployment is low, wages are rising and employers are still in fact adding jobs. On the whole, the report tells retail leaders that consumers will have confidence to continue spending, just as they have in past months. While inflation is causing consumers to make choices about what they buy, overall they are still shopping.
What it means for the Fed: This is where it starts to get tricky. The Federal Reserve has watched the job market remain hot as inflation continued to tick up, and it raised interest rates to tamp down demand in an effort to get inflation under control. This jobs report shows that there is some cooling happening, which the Fed would expect after such aggressive interest rate hikes. That shows up in the slowdown to job growth. But there are no signs that unemployment is ticking up, even as many members of the Fed’s key committee have projected that number will rise at some point this year. On balance, the job market is still strong. So the Fed will be watching closely to see whether inflation comes down in next week’s Consumer Price Index, even as the job market is still mostly robust. That could go a long way toward informing the size of the rate increase when the committee meets May 2-3, even as the Fed must now also factor in the fallout from the banking crisis wrought by the collapse of Silicon Valley Bank.
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.