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March Nonfarm Payrolls Rose 120,000; Unemployment Ticks Down to 8.2%

April 6, 2012
By: Jim Wiesemeyer, Pro Farmer Washington Consultant
Untitled Document

via a special arrangement with Informa Economics, Inc.

Unemployment rate decline attributed to fewer seeking work


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


U.S. nonfarm payrolls increased 120,000 in March, about half the pace seen in February, the U.S. Labor Dept. said today. This is the first time since Nov. 2011 that the economy has failed to add more than 200,000 jobs.

Expectations were for 190,000 to 205,000 jobs to have been added in March.

The unemployment rate downticked to 8.2 percent, but that was attributed largely to fewer people looking for work. The number of unemployed was put at 12.7 million, little changed from the prior month.

Expectations were for the unemployment rate to be unchanged at 8.3 percent.

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.5 hours in March. Expectations were for that to be at 34.5 hours, but unchanged from the prior month.

In March, average hourly earnings for all employees rose by 5 cents, or 0.2 percent, to $23.39. Over the past 12 months, average hourly earnings have increased by 2.1 percent. Expectations were for average hourly earnings to rise 0.2 percent.

The number of long-term unemployed (those jobless for 27 weeks and over) was essentially unchanged at 5.3 million in March. These individuals accounted for 42.5 percent of the unemployed. Since April 2010, the number of long-term unemployed has fallen by 1.4 million.

Revisions made included January nonfarm payrolls revised to being up 275,000 from 284,000 previously, but February was revised up to 240,000 from 227,000 previously.

April’s Employment Situation report is due out May 4.

Market response: With most stock and most financial markets closed today, the reaction will come in Monday trade. But stock futures declined in the wake of the data release.


Comments: The report would appear to back up worries that were expressed in the Federal Open Market Committee (FOMC) March 13 minutes – that the employment growth in recent months was potentially suspect given other economic data. While the unemployment rate decreasing will be taken as a positive, the fact it came as fewer sought work will take some of the support out of the figure.

The expectations of another round of quantitative easing (QE) by the Fed dropped immediately following the March 13 FOMC session when the Fed announced its policy direction was unchanged. Comments by Fed Chairman Bernanke expressing concern about employment growth started to revive expectations the final week of March for more stimulus actions by the Fed. But those hopes again were dashed following release of the March 13 FOMC minutes.

Today’s report would appear to put the QE potential back in play. But for that to be verified, the focus will now shift to other data and of course on comments by Federal Reserve officials in coming days for hints of the Fed shifting their current view that additional help for the US economy was not required at this time.



NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 


 

 

 

 

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