US Jobs Growth Disappoints

<br /> US Jobs Growth Disappoints – Marc to Market<br />




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The US jobs growth slowed considerably
more than expected in March and the disappointment pushed the dollar and equities initially lower. 
The US created 98k jobs in March, well
below market expectations for around 175k jobs.
  Adding insult to injury, revisions
to the January and February data took off another
38k job.   Wage growth also failed to meet expectations as the
year-over-year pace slowed to 2.7% from 2.8%.  
However, there were a couple of bright
spots.
  First,
the unemployment unexpectedly fell to 4.5% from
4.7%.  This is a new cyclical low.
 Most importantly, the decline in the unemployment rate was recorded even though the participation rate
was unchanged at 63%.  Also, the
underemployment rate fell to 8.9%, which is also a new cyclical low.
 Those taking part-time work, even though full-time work is desired, fell by 151k.  
There are two drivers of the slower job
growth. 
 First, jobs growth in January and
February exaggerated the underlying of hiring.  Second, the weather seemed to skew the data.  February
was the second warmest February on record, and then the winter storm that
struck East Coast in March.  Both elements seemed evident in the
construction sector.  After a 59k hiring spree in February, job growth
slowed to a mere 6k.  Retailers also
seemed to be similarly impacted.  A
combination of macro considerations (slower consumption in Q1 after a robust Q4
16) and weather led to a 30k job loss.  
Meanwhile, Canada reported stronger jobs
growth than expected in March, continuing the string of robust reports.
  Canada created 19.4k jobs in March,
more than three times the median expectation of the Bloomberg survey and more
than the 15.3k jobs grown in February.  These were nearly all full-time
positions.  The cloud in the silver lining was the unemployment rate,
which ticked up to 6.7% from 6.6%, as the participation rate rose to 65.9% from
65.8.%.

US yields have softened,
and the 10-year yield is holding a little above the 2.30% level that has
represented a floor. 
 The dollar initially fell on the news but has recovered those initial losses.
 The JPY110 continues to limit the greenback’s losses against the yen.
 The euro spiked to about $1.0665 before returning to the session lows
near $1.0610.  The Canadian dollar is the strongest of the majors, gaining
about 0.35% against the US dollar, and is trading at new highs for the week.  
 

Disclaimer


US Jobs Growth Disappoints
US Jobs Growth Disappoints

Reviewed by Marc Chandler
on

April 07, 2017


Rating: 5

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