The United States economy added many fewer jobs than expected in March as poor weather, a stronger dollar and energy sector weakness impacted the pace of hiring.
Total nonfarm payroll employment increased by just 126,000 in March, which was well below the 247,000 forecast, while the unemployment rate was unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today.
Average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $24.86. Over the year, average hourly earnings have risen by 2.1 percent.
The change in total nonfarm payroll employment for January was revised downward from 239,000 to 201,000, and the change for February was revised from 295,000 to 264,000.
With these revisions, employment gains in January and February combined were 69,000 less than previously reported. Over the past 3 months, job gains have averaged 197,000 per month.
“There are three things here – the first is definitely weather. You can see this in the construction decline and the weak retail numbers,” Mark Zandi, chief economist of Moody’s Analytics, said on CNBC.
“Second, there is energy, obviously that is having an impact, most notably resource mining was down 11,000 jobs. And lastly, the [strong] dollar is now really having an effect.”
Employment in mining declined by 11,000 in March. The industry has lost 30,000 jobs thus far in 2015, after adding 41,000 jobs in 2014. The employment declines in the first quarter of 2015, as well as the gains in 2014, were concentrated in support activities for mining, which includes support for oil and gas extraction.
Good Friday unique in that it’s a stock and commodity market holiday in the US but is not a federal holiday. That means the government and many businesses will be open and release data, such as the non-farm payrolls report, as normal.
Nevertheless, this labour report is still important because the Federal Reserve is on the verge of raising interest rates. The current market consensus is that rates will rise in mid-2015 although this is a moving target that will be dictated by jobs and inflation data.
“A weaker jobs report could push back expectations for a US interest rate hike, which may support bullion,” HSBC’s James Steel said. “But given the steepness of the rally this week in reaction to the ADP numbers, job gains would likely have to be very disappointing to further boost bullion near term.”
Meanwhile, other jobs data this week conflicted. Weeky unemployment claims dropped 20,000 to 268,000 in the week ended March 28, the lowest reading since January 24 and much better than the 286,000 forecast.
But this was in stark contrast to Wednesday’s ADP report that showed that only 189,000 jobs were added in March, well below the 226,000 expected.
In commodities, gold for June delivery on the Comex division of the New York Mercantile Exchange closed Thursday down $7.30 at $1,200.90 per ounce and last traded at $1.202.50 in after-hours trade.
Comex copper futures for May delivery ended Thursday at $2.7340, down 1.45 cents, while the most-actively traded light sweet crude (WTI) crude oil settled at $49.14 per barrel, down 95 cents.
The post US non-farm payrolls for March undershoot at 126k appeared first on The Bullion Desk.
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