[According to the interviewee at investmentrarities.com
the AS has now quanitified its assertions. porc would like to know: just when would a Fed-less economy would have pulled these workers into the economy? And, prior to that point, how would they have been supporting themselves in a society that would disallow government-required transfer payments to the poor or unemployed?]
Jobless Rate Sinks Despite Slow Hiring
By Caren Bohan -- Friday April 2 2:02 PM ET
WASHINGTON (Reuters) - The U.S. unemployment rate sank to a 29-year
low in March, but hints of a possible slowing in the roaring economy
emerged as the pace of job creation slowed abruptly.
The jobless rate fell to 4.2 percent from 4.4 percent in February, the
Labor Department said Friday. That was the lowest rate since a
matching 4.2 percent in February 1970.
But the number of workers on payrolls outside the farm sector grew
last month by a slight 46,000, the weakest month since severe
snowstorms caused a decline in payrolls in January 1996. Cold weather
played a role in at least some of the March payrolls weakness.
The payrolls figures are calculated from a survey of employers that is
separate from the poll of households used to calculate the
unemployment rate.
Still economists said the two reports told a consistent story of a job
market that had become so strong that the supply of available workers
was dwindling rapidly.
''We have finally started running into the brick wall of the tight
labor market,'' said Sung Won Sohn, economist at Wells Fargo Bank.
''That could be a harbinger of slower economic growth.''
A very low unemployment rate can curb economic growth by limiting the
ability of businesses to expand.
The weak payroll number cheered the bond market as investors reasoned
it lowered the risk of inflation.
In an abbreviated session ahead of the Easter weekend, the benchmark
30-year U.S. Treasury rose more than a full point. Its yield, which
moves in the opposite direction of the price, fell to 5.60 percent
from 5.68 percent late Thursday. Major stock markets were closed.
The March payrolls gain was far below the 166,000 projected by U.S.
economists in a Reuters survey.
In February, payrolls grew 297,000, revised up from a previously
reported 275,000, the department said.
Private economists and Federal Reserve policymakers alike have been
forecasting a slowdown in the economy for almost two years. But growth
proved remarkably resilient even as many of the U.S. trading partners
in Asia and Latin America suffered from wrenching economic crises.
So despite the weak payrolls growth, economists were cautious about
concluding that a softer pace of economic growth was at hand.
''You have to look at this as evidence on that side,'' said Bill
Cheney, chief economist at John Hancock Financial Services in Boston.
On the other hand, he added, ''The anecdotal evidence suggests the job
market is still very tight.''
Lynn Reaser, economist at Bank of America, agreed: ''I think it would
be premature to overreact to this.''
She said the March payroll slowdown could be part of a seasonal quirk
as the same pattern occurred last March.
A dramatic decline in construction jobs of 47,000 helped drag down
overall payroll growth. Katharine Abraham, commissioner of the Labor
Department's Bureau of Labor Statistics, blamed that on the weather.
She noted that prior to March, the construction sector had been
enjoying brisk job growth, both because of the robust housing market
and because the earlier winter months had been relatively mild. That
meant the builders already had plenty of workers on their payrolls.
The cool weather also appeared to have depressed hiring at restaurants
and bars, Abraham said.
The manufacturing job market contracted for a seventh straight month,
losing 35,000 positions. But the sector could be poised for a rebound
in coming months from its export-related slump, according to data
reported Thursday from the National Association of Purchasing
Management.
The much-watched NAPM index rose to 54.3 in March from 52.4, recording
for the second month in a row a reading above the level of 50 that
signals manufacturing expansion.
With factory hiring still in the doldrums, the large service-producing
areas of the economy picked up some of the slack, churning out 135,000
new positions. Government jobs increased 20,000.
Nonsupervisory workers throughout the economy pocketed a three-cent
gain in average hourly earnings, which grew to $13.09 from $13.06 in
February. The length of the workweek fell by one-tenth of an hour to
34.5 hours from 34.6 hours
In one upbeat note of the employment report, the unemployment rate for
Hispanic Americans declined to 5.8 percent, the lowest since the
department began collecting the data in 1972. |
