The ADP employment report on Wednesday should’ve given hints. The initial jobless claims report on Thursday should’ve told people it was coming. Any doubts about what went on with the labor market in March were put to rest when the Bureau of Labor Statistics delivered its non-farm payroll report on Friday.
The agency said that the non-farm payrolls only increased by 88,000 during the month, a far cry from the 193,000 the economists were expecting. The silver lining of the report was that the unemployment rate actually ticked down to 7.6 percent from 7.7 percent in February. It was the lowest unemployment rate figure in four years. Economists had expected the rate to remain flat.
The dark lining was that the unemployment rate dropped not because of an abundance of new jobs, but because more people quit looking for work. The number of people “not in the labor force” increased by 663,000 during March. The participation rate hit a 40-year low of 63.3 percent.
The anemic March figures were the worst since monthly gain in nine months. June 2012 was the last time that less than 100,000 jobs were created in a month.
Meanwhile, January’s new jobs were upwardly revised from 119,000 to 148,000 and February was revised up from 236,000 to 268,000.
The feeble report should thwart conversations about the Federal Reserve stopping its $85 billion per month in quantitative easing efforts sooner than later. Fed Chairman Ben Bernanke stated in March that the bond-buying packages weren’t going to be considered until the fed was confident that the recovering housing market and increase in hiring that has been going on wasn’t just a temporary condition. The markets may be overreacting on Friday to the jobs data, but the somber month of hiring should goose the central bank to continue with its monetary easing efforts to stimulate the economy.
Wall Street has been lumbering along in the red all day with the Dow Jones Industrial Average seesawing back and forth between triple digit losses on the day. After a strong first quarter with gains of 11 percent, the Dow is starting the second quarter on a down note, looking apparently going to post the worst week since that of December 24, on pace for a 0.5 percent red week after hitting a new all-time high on Tuesday of 14.684.49.
On the day, the S&P 500 is off by 12 points and the Nasdaq is down 33 points. The S&P 500 is on track to lose 1.3 percent on the week. The Nasdaq is on pace to lose 2.3 percent on the week.
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