US re­veals only 126,000 jobs added in March

The China Post - - INTERNATIONAL - BY JOSH BOAK

The weak­en­ing U.S. econ­omy spilled into the job mar­ket in March as em­ploy­ers added only 126,000 jobs, the fewest since De­cem­ber 2013, snap­ping a streak of 12 straight months of gains above 200,000.

The La­bor Depart­ment said Fri­day that the un­em­ploy­ment rate re­mained at 5.5 per­cent.

Eco­nomic growth has been ham­mered this year by harsh win­ter weather, fac­tory slow­downs and lack­lus­ter con­struc­tion ac­tiv­ity. The man­u­fac­tur­ing, con­struc­tion and gov­ern­ment sec­tors each shed work­ers, while hir­ing at restau­rants plunged from Fe­bru­ary.

In ad­di­tion to re­port­ing the slug­gish hir­ing in March, the gov­ern­ment re­vised down its es­ti­mate of job gains in Fe­bru­ary and Jan­uary by a com­bined 69,000.

Wage growth in March re­mained mod­est. Av­er­age hourly wages rose 7 cents to US$24.86 an hour.

Past job growth, along with cheaper gaso­line, has yet to sig­nif­i­cantly boost con­sumer spend­ing. A con­tin­ued de­cel­er­a­tion in hir­ing could de­lay the Fed­eral Re­serve from rais­ing in­ter­est rates in midyear.

The Fed sig­naled last month that it would be cau­tious in rais­ing rates from record lows. The Fed has yet to rule out a June rate hike. But many an­a­lysts ex­pect the first in­crease no ear­lier than Septem­ber. In part, that’s be­cause Fed of­fi­cials have re­vised down the range of un­em­ploy­ment they view as con­sis­tent with a healthy econ­omy to 5 per­cent to 5.2 per­cent from 5.2 per­cent to 5.5 per­cent pre­vi­ously.

Chair Janet Yellen has stressed that even when the Fed be­gins rais­ing rates, it will do so only very grad­u­ally.

A Fed rate hike would point to sta­ble growth. But the econ­omy has weak­ened in the first two months of 2015, in part be­cause of the tough win­ter.

The At­lanta Fed­eral Re­serve es­ti­mates that growth was flat dur­ing the first three months of 2015. JPMor­gan Chase says that growth is track­ing at an an­nu­al­ized rate of 0.6 per­cent. Those fore­casts are sig­nif­i­cantly be­low the an­nual growth rate of 2.2 per­cent in the fi­nal three months of 2014 and a rate of more than 4 per­cent in the mid­dle of last year.

Fac­tory or­ders have been mixed, hav­ing dropped sharply in Jan­uary be­fore tick­ing up modestly in Fe­bru­ary. Cheaper oil has led en­ergy com­pa­nies to halt or­ders for pipe­lines and equip­ment, hurt­ing man­u­fac­tur­ers. At the same time, the strength­en­ing dollar has made Amer­i­can- made goods costlier abroad, thereby cut­ting into ex­ports.

This year’s job growth has yet to ig­nite a larger boom in con­sumer spend­ing. Av­er­age hourly wages have risen a tepid 2 per­cent in the past 12 months. McDon­ald’s, Wal­Mart, the Gap and other ma­jor em­ploy­ers have an­nounced raises for their low­est-paid em­ploy­ees. But those pay raises are stag­gered and un­likely to fuel faster wage growth.

The econ­omy has dis­pro­por­tion­ately added low-pay­ing jobs in the re­tail and restau­rant sec­tors since the re­cov­ery from the Great Re­ces­sion be­gan nearly six years ago. Adding jobs in the low­est-paid in­dus­tries can sup­press av­er­age hourly wages, even when em­ploy­ers are re­ward­ing cashiers, wait­ers and sales clerks with pay bumps.

Yet ev­i­dence of a strong spring re­bound might hinge on hir­ing by re­tail­ers and restau­rants, noted Tara Sin­clair, a Ge­orge Wash­ing­ton Uni­ver­sity pro­fes­sor and chief econ­o­mist at In­deed, the job-post­ing web site.

Con­tin­ued hir­ing by re­tail­ers and restau­rants would sug­gest that em­ploy­ers an­tic­i­pate solid de­mand from cus­tomers, who might fi­nally be com­fort­able spend­ing their sav­ings from cheaper gas. Prices at the pump have plunged 33 per­cent over the past year to a na­tional av­er­age of US$2.40 a gal­lon, ac­cord­ing to AAA.

AP

Frances Scog­gins, left, speaks to Michael McCall, gen­eral manager for Chat­tanooga La­bel­ing Sys­tems, about her re­sume dur­ing a huge 15-county North Ge­or­gia job fair at The Colon­nade in Ring­gold, Ge­or­gia on Thurs­day, April 2.

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