Employers in March added the fewest workers since December 2013 and the jobless rate held at 5.5 percent as companies sought to bring U.S. head counts in line with an economy that throttled back at the start of the year.
The 126,000 increase was weaker than the most pessimistic forecast in a Bloomberg survey and followed a 264,000 gain a month earlier that was smaller than initially reported, the Labor Department in Washington said. The median forecast in a Bloomberg survey of economists called for a 245,000 advance. Average hourly earnings rose 2.1 percent from a year earlier.
Companies tempered the pace of the hiring as rough winter weather, tepid overseas markets and a slowdown in energy-related capital investment combined to sting the economy. Even with the moderation in March payrolls, persistent employment opportunities are keeping Americans upbeat and laying the ground for a rebound in spending.
“There’s really no way to sugar coat this: This is a soft print all the way around, no matter how you slice it,” said Omair Sharif, rates sales strategist at Newedge USA LLC in New York. “It seems that it’s corroborating that the U.S. definitely hit a soft patch in the first quarter.
“Hiring just took a breather in the month of March. I wouldn’t read this as anything other than that. We should get back on track in the second quarter,” he said.
The smaller advance in employment broke a year-long string of monthly gains exceeding 200,000, which was the longest such stretch since 1995.
Revised Months
Payroll estimates of 98 economists in the Bloomberg survey ranged from gains of 179,000 to 300,000 after a previously reported 295,000 advance. Revisions to prior reports subtracted a total of 69,000 jobs to overall payrolls in the previous two months.
The yield on the benchmark 10-year Treasury note dropped to 1.84 percent at 8:42 a.m. in New York from 1.91 percent late Thursday. The contract on the Standard & Poor’s 500 Index expiring in June declined 0.5 percent.
The slowdown in employment was broad-based. Goods producers, including factories, construction firms and the industries that support oil and gas well drilling, cut jobs last month. Manufacturingpayrolls dropped for the first time since July 2013 and employment in the leisure and hospitality industries was the weakest since September that same year.