Non-farm payrolls increased 126,000 last month, the smallest gain since December 2013. The manufacturing sector, which has been impacted by the strong dollar, shed 13,000 jobs, the largest drop since July 2013.
The figures were well below forecasts that 245,000 new jobs were added in March and end a run of 12 consecutive months of rises above 200,000, which was the longest period of increases above 200,000 since 1994.
With markets closed for Good Friday, US stock futures fell sharply on the back of the weaker-than-expected figures, suggesting shares will be under pressure next week.
To add to the disappointing figures, the number of new jobs created in January and February was also revised down by 69,000. However, the unemployment rate held at 5.5pc, a six-and-a-half-year low.
Paul Ashworth, chief US economist at Capital Economics, said: “The well-below consensus 126,000 increase in non-farm payrolls in March, particularly when combined with the downward revisions to the gains in January and February, will raise fears that the labour market is imploding. It isn’t.
That said, a slowdown in the pace of employment growth might delay the Fed’s first rate hike until September, particularly when added to the signs of slower GDP growth in Q1.”
“Payrolls are always volatile even at the best of times and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer.
“All the other labour market indicators that we track point suggest that labour market conditions are still very strong: initial jobless claims are unusually low, the job openings rate is near a record high and the employment indices in the various activity surveys are at robust levels.
“Accordingly, we very much doubt this is the start of a new slump, like we’ve seen occasionally before during this recovery.”
telegraph.co.uk
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