Sunday 22 April 2018

Big jobs setback for US in March

New York, April 7, 2012

Employers hired far fewer workers in March than in previous months, keeping the door open for the Federal Reserve to provide more monetary support for a still sluggish economy.

The report was seized upon by Republicans hoping to make the weak economy the centerpiece of their campaign for November's presidential and congressional elections.

Even as the unemployment rate fell to a three-year low of 8.2 percent, job growth slowed to 120,000 last month, the Labor Department said on Friday, the smallest increase since October.

That was less than half the average monthly increase in the prior three months and way below the lowest estimate in a Reuters survey. Economists had expected an increase of 203,000 and the jobless rate to hold at 8.3 percent.

The numbers likely reflected the fading boost from unseasonably warm winter weather and brought the job market, which had been showing surprising strength since December, more in line with signs of a broader slowdown in the overall economy.

It also backed the caution expressed by Fed Chairman Ben Bernanke last week about whether the labor market could sustain gains above the 200,000 mark when economic growth is tracking a sub-par rate.

The data raises the chances of the central bank launching a third bond buying program or quantitative easing.

"The economy may not be growing as strongly as the data around the turn of the year, benefiting from favorable weather, suggested," said Michelle Girard, senior economist at RBS in Stamford, Connecticut. "While QE3 may not be seen as the odds-on bet, nothing can be ruled out."

Retail employment surprisingly fell for the second straight month, resulting in the vast private services sector adding jobs at the slowest pace in seven months.

Economists were puzzled by the drop given that retailers such as Macy's and Target reported brisk business in March.

Manufacturing jobs picked up, even though the workweek fell slightly. Factory jobs have increased by 120,000 so far this year, helped by carmakers trying to meet pent-up demand for motor vehicles.

The gains in manufacturing contributed to lifting hourly earnings by five cents last month, which should help to support spending.

Prices for Treasury debt rallied on the report, pushing yields to more than three-week lows, as investors anticipated further bond purchases by the Fed. The dollar fell against a basket of currencies.

Stock futures fell more than 1 percent, suggesting that shares could fall on Monday when the New York Stock Exchange reopens after being closed for the Good Friday holiday.-Reuters

Tags: Jobs | US | Obama | Employers | setback | March |


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