US jobs growth slows more than expected
Employers added 98,000 jobs last month, far below 180,000 economists had forecast
Figures for last month showed the unemployment rate fell to 4.5 per cent from 4.7 per cent. Photograph: Spencer Platt/Getty Images
The pace of US job growth slowed more than expected in March, but the jobless rate fell to its lowest level since 2007, further muddying the outlook for the economy’s performance in the first quarter of this year.
US employers added 98,000 jobs last month, far below the 180,000 that Wall Street economists forecast. March’s rate of job growth was the weakest since May 2016 and compares with February when employers added 219,000 jobs.
Meanwhile, the unemployment rate fell to 4.5 per cent from 4.7 per cent. Wage growth slowed to a year-on-year pace of 2.7 per cent, from 2.8 per cent.
The figures from March were “almost certainly negatively affected by the weather,” said Thomas Simons, senior money market economist at Jefferies.
“Not only did February likely pull some jobs forward . . . but also there was a significant snowstorm in the Northeast during the survey week,” he added.
Still, the reading highlights the economy’s choppy performance in the first three months of this year. A running model from the Atlanta Fed suggests the economy may have grown at an annualised pace of only 1.2 per cent in the first quarter, representing a slowdown from the 2.1 per cent growth rate in the fourth quarter of 2016.
The mixed data come as the Federal Reserve is deciding how quickly to tighten monetary policy this year, after increasing rates once a year in 2015 and 2016.
Officials have also begun to debate more vigorously when the central bank should begin trimming its $4.5 trillion (€4.2 trillion) balance sheet. Minutes from the Fed’s March meeting indicated that policymakers may support action on that front as soon as the end of this year.
“The slowdown in payroll growth is exactly what you would expect when the economy closes in on full-employment. So yes the data was a little weaker, but it won’t change the outlook on monetary policy,” noted Luke Bartholomew, investment strategist at Aberdeen Asset Management Investment.
US debt rallied sharply after the release of the jobs data, sending rates lower. The 10-year yield recently fell by 3.57 basis points to 2.305 per cent. Notably, however, investors were already bidding-up haven assets after the US hit Syria with a missile strike overnight.
– (Copyright The Financial Times Limited 2017)