Job growth slows to a six-month low in March

Businesses added 241,000 jobs in March, with construction, manufacturing and transportation leading the growth, payroll processor ADP said Wednesday in a separate estimate.

Although the tariffs would not take effect until June at the earliest, Bernard Baumohl, chief global economist at the Economic Outlook Group, saw in the disappointing March jobs growth an early sign "of an economy that is struggling with uncertainty of what lies ahead".

"The declaration by Trump that he has instructed the US Trade Representative to consider another $100 billion of tariffs under section 301 has once again sent markets lower, although not as much as previous tariff announcements have", noted Craig Erlam at online trading platform operator Oanda.

"It's a pretty solid economic picture altogether", he said, although job creation slowed from February's unusually large burst of 313,000 positions.

The average hourly wage for private sector workers was $26.82 in March, up 2.7% from a year ago. "A payback from strong February job gains is more to blame", Levy added.

However, it could also be that the March job survey is an outlier or suffers from technical issues having to do with seasonal adjustment or survey-response rates and may be revised higher in future months. Still, the expansion has been puzzlingly slow, with economic growth averaging just 2.2 percent per year - about a percentage point below the historical average. Economists polled by Reuters had forecast the economy adding 193,000 jobs last month and the unemployment rate dropping to 4.0 percent. The dollar weakened against a basket of currencies and US Treasury prices rose. Economists do not see an impact on hiring in the near-term from the stock market selloff, which has caused a tightening in financial conditions.

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Growth in the January-March period tends to be weak because of a seasonal quirk.

The economy grew at a 2.9 per cent pace in the fourth quarter.

Analysts say the United States labor market will remain strong, supported by major tax cuts and fiscal spending, despite worries about a trade dispute with China.

"The principle story as we see it is that despite above trend jobs growth in the main, the unemployment rate has been flat for six months". The labour force participation rate, or the proportion of working-age Americans who have a job or are looking for one, slipped one-tenth of a percentage point to 62.9 per cent in March after rising to a five-month high of 63.0 per cent in February.

Analysts said that the cold weather may have contributed to the slowdown.

Construction shed 15,000 jobs and retail trade employment dipped by 4,000. Government payrolls rose by 1,000 in March.

  • Ronnie Bowen