Hiring in March slowed abruptly to its weakest rhythm in over a year, following months months of strong growth.
The Labor Department announced Friday that employers added only 126,000 net new jobs in March. Forecasters expected almost double. It is a lower level than half the monthly average in 2014.
The unemployment rate remained unchanged at 5.5% last month, but this can be explained by the shrinking of the work force, with the number of new jobs dropping significantly.
One of the few good news of the Labor’s Department report is that the average pay of workers grew up significantly last month. Also, business services recorded continued solid job gains. This sector accounts for high-paying occupations such as engineers and architects. Also, the retail sector has recovered all the jobs it lost in the recession, after a good last month.
The report published on Friday was one of the feeble in recent months. The results will probably put in doubt the strength of the overall economy, and if similar reports will follow, the Federal Reserve could postpone raising interest rates, which could happen in June.
Friday’s report also suggested that average hours of work dropped in March. Experts revised downward payroll employment numbers for the previous two months by a combined 69,000, but in January and February the average monthly job growth was still at 281,000 for the six months before March.
It is still not clear how much the extremely cold weather in March may have slowed hiring. Construction payrolls remained constant, while restaurants created much fewer than expected new jobs.
Hiring in recent months had been overachieving the expectations of analysts, considering the slowdown in total economic output. U.S. economic momentum has decreased in the first quarter, due to the snowy weather but also to a drop in exports and a slowing in investments in the energy sector, after oil prices have plummeted.
The mining and logging sector, which includes oil and gas extraction, had suffered a serious contraction. It lost 11,000 jobs in March and has dropped 30,000 positions so far in 2015.
Private sector workers recorded an average hourly earnings raise by 7 cents, 0.3%, to $24.86 in March. Economists had expected a 0.2% rise in salary from the previous month. Compared to last year’s levels, hourly earnings grew by 2.1% in March, slightly over the 2% annual pace of recent years.
The employment-population ratio was 59.3% in Marched, steady compared to February but higher by 0.3% than in March 2014.
Image Source: Ozone South Bridge
