US nonfarm payrolls rise by 98,000 in March, but unemployment falls
US nonfarm payrolls increased by 98,000 in March even as the unemployment rate fell to 4.5% - the lowest tally since 2007.
A snowstorm in the US Northeast during the survey week likely depressed the non-farm payrolls number, said Ian Shepherdson, chief US economist at Pantheon Macroeconomics.
In the run-up to the report's release, on Thursday, HSBC and Deutsche Bank both cautioned that a downward surprise was likely on the cards, with the former expecting February's mild weather boost to non-farm payrolls to unwind.
The consensus forecast for today's non-farm payrolls number had been for a rise of 174,000 and for the jobless rate to hold at 4.7%.
Non-farm payrolls for the prior two months were revised lower by a combined 38,000.
"The March non-farm payrolls number was a phenomenal miss and will add to market uncertainty following the Syria missile strikes," said Marcus Bullus, trading director at MB Capital.
"The weakest print for a decade could leave equities with a bloodied nose, at least in the short term. The upshot of this very poor number could be a more dovish and cautious Fed," Bullus added.
In an initial reaction, as of 1334 GMT the yield on the benchmark 10-year US Treasury note was down by six basis points to 2.28%, its lowest level since November and below an area of technical support.
"More importantly, the unemployment rate is now at the bottom of the Fed's forecast range for Q4 this year - the March drop was statistically significant - and below the bottom of the Fed's 4.7-to-5.0% range for the Nairu. It shows no sign of bottoming. For the Fed, the unemployment rate is the ultimate arbiter of the tightness of the labor market, and the prospect of the rate continuing to fall towards 4% will be very disconcerting," Shepherdson added.
Job creation in the private sector fell from 221,000 in February to 89,000 for March, as the goods producing side of the economy generated just 28,000 new posts, down from the previous month's outsized gain of 96.000.
Hiring was also much weaker in services, dropping back from 125,000 in the month before to 61,000.
Average hourly earnings were ahead by 2.7% year-on-year (consensus: 2.8%).
The unemployment rate on the other hand fell by two tenths of a percentage point to 4.5% as the number of people out of work dropped by 326,000 and the labour force participation, a key gauge of labour market slack, held at 63.0%.
To take note of, the rate of joblessness is derived from the Household Survey, which is contained in the same report but obtained via a separate survey than the one that yields the figure for non-farm payrolls.
Other indicators contained in the report worth noting are the length of the average work week which was steady at 34.3 hours and the index of aggregate weekly hours, which advanced by 0.1% on the month.