US sees moderate growth in jobs

The US economy created jobs at a moderate pace in March but the unemployment rate rose two-tenths of a percentage point, the government said yesterday, suggesting the labour market is lagging behind the rapid pace of growth elsewhere in the economy.

The Labor Department said the number of workers on US payrolls grew by 58,000 in March, a slightly larger rise than the 41,000 projected by economists in a Reuters survey. But the number appeared much less impressive in light of a huge downward revision to February payrolls. The department said February payrolls fell by 2,000 - a far worse showing than the 66,000 gain the department estimated a month ago.

It did not offer an explanation for the substantial change to February's payrolls number but a breakdown of the figures showed many of the revisions were in services jobs.

The unemployment rate climbed in March to 5.7 per cent, the highest since December, from 5.5 per cent in February. Private economists had expected a rise in the jobless rate to only 5.6 per cent. "It is a little weaker than I was expecting. . . It certainly suggests we are going to have a relatively slow expansion at this moment," said Mr Delos Smith, analyst at the Conference Board in New York.

The relatively soft report should ease pressure on the Federal Reserve to raise interest rates. US bond prices turned positive following the report while the dollar dipped.

Less than half of the payrolls growth logged in March occurred in the private sector. Government jobs jumped 37,000 while payrolls at private firms rose by 21,000.

While the latest jobs report did not show a fiery pace of growth, it does help solidify an already widespread belief that the economy is emerging from a slump that began last March.

The downward revision of the February number meant that the March payrolls gain was the first in eight months and the two-month trend pointed to stabilisation in the labour market, according to a department official. - (Reuters)