The Economy

Job Gains Much Weaker Than Forecast

Nonfarm U.S. payrolls added only 126,000 jobs in March, more than 100,000 less than economists predicted.
Katie Kuehner-HebertApril 3, 2015
Job Gains Much Weaker Than Forecast

The U.S. economy created only half of the jobs that experts projected it would create in March, the weakest showing in payroll additions 15 months.

The economy added 126,000 new nonfarm jobs last month, the smallest gain since December 2013, and the unemployment rate held steady at 5.5%, the Labor Department said.

The long-term unemployment rate fell to 1.6%, down 0.7 percentage point from a year ago. Average hourly earnings increased by 7 cents for all private-sector employees, contributing to a 2.1% increase in nominal hourly wages over the last 12 months.

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“While March’s numbers aren’t as robust as we’ve seen over the last year, overall trends remain solid, and there is every reason to be optimistic about our economic trajectory going forward,” Labor Secretary Thomas E. Perez said in a statement issued after the release of the unemployment numbers.

“We’ve made incredible strides since the depths of the Great Recession, but there’s more work to do to make sure every person can benefit from this recovery.”

Analysts were not as optimistic, as the average consensus was that 245,000 jobs would be created, according to a Reuters article Friday.

“There’s no question that the economy is showing the negative effects of the stronger dollar and the collapse in oil prices,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, told Reuters. “Corporate profits have come under pressure, and hiring has been adjusted in response.”

Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York, told Reuters that, while weather very likely contributed to the lower-than-expected job gain, “the latest numbers bring payrolls more in line with other data that signals some underlying slowing.” Anglų kalbos kursai Kaune

Now there is increased speculation that the Federal Reserve could delay raising interest rates.

“The U.S. central bank has appeared keen to raise its key overnight lending rate, which it has kept near zero since December 2008,” Reuters wrote. “But the economy’s recent softness has led investors to push back bets on the rate lift-off. Some believe the Fed could even wait until 2016.”

Featured image: Thinkstock

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