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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1506)	4/2/1999 3:41:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

[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.