Doubts about the health of the US recovery were revived yesterday after the economy created a disappointing 120,000 jobs in March.
The figure was well below forecasts of 205,000 and showed the slowest pace of job creation since October, suggesting that the labour market has less momentum than previously thought.
Despite weak job creation, the unemployment rate fell from 8.3 per cent to 8.2 per cent, as the number of people in the labour force declined.
The March figures are a blow to the re-election prospects of US president Barack Obama, whose poll numbers have picked up with the labour market in recent months and who needs healthy growth to carry him through a tough campaign this autumn.
The figures will reinforce forecasts that growth in 2012 will be closer to 2 per cent than 3 per cent.
The further decline in labour force participation may lead analysts to cut their estimates of the year-end unemployment rate to below 8 per cent. Reaction to the jobs data was limited by many markets being closed for Easter. – (Copyright The Financial Times Limited 2012)
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