Economy

Losses lengthen after March jobs data jolt

Losses lengthen after March jobs data jolt

Revisions to prior reports subtracted a total of 50,000 jobs from payrolls in the previous two months, according to the figures.

Economists had been expecting a payrolls gain of 193,000 and the unemployment rate to decline one-tenth of a point to 4 percent. There has been an increase in reports of employers, especially in the construction and manufacturing sectors, struggling to find qualified workers. This is also followed an upwardly revised 326,000 surge in February. A separate government report last month showed that there was almost one open job for every unemployed person, the lowest ratio on records dating back two decades.

Meanwhile, the Labor Department said the annual rate of growth in average hourly employee earnings accelerated to 2.7 percent in March from 2.6 percent in February.

The nation's unemployment rate stayed unchanged at 4.1 percent. That's good news to economists, who want to see the labor force participation rate return to pre-recession levels of about 66 percent.

Average hourly earnings rose by 8 cents, settling at $26.82. In the entire job market, "you're not going to lose 100,000 jobs because of people not adding [jobs] to steel and aluminum mills".

There is hope that wage growth will accelerate in the second half of the year and allow the USA central bank to continue raising interest rates. A more volatile stock market?

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'The Fed will be primarily focused on the increase in average hourly earnings, ' said Paul Ashworth, chief US economist at Capital Economics in Toronto.

Worker pay probably also benefited as the 15th of the month, a payday for many people, fell within the government's survey week that includes the 12th.

Manufacturing and health care industries each added 22,000 jobs in March.

"Today's overall jobs number is a little bit of a pullback, but it wasn't a horrific report". Still, the expansion has been puzzlingly slow, with economic growth averaging just 2.2 percent a year - about a percentage point below the historical average. Yet the steady influx of new workers, which gives employers more hiring options than the low unemployment rate might otherwise suggest, may be holding back overall pay growth.

The solid run of hiring and bigger after-tax paychecks will help sustain growth in consumer spending, which is nonetheless projected to cool in the first quarter following the strongest quarter in three years.

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