The U.S. economy was humming along nicely until a poor March jobs report released Friday sent shivers through Wall Street and forced the Federal Reserve to rethink its strategy.
The Labor Department reported that only 126,000 jobs were created in March — that’s half the number of jobs that was expected and the lowest number since December. The unemployment rate, meanwhile, remained steady at 5.5 percent.
Jeffrey MacDonald, director of Fixed Income Strategy at Fiduciary Trust Company International, told USA Today no one expected the job numbers to be this low.
“It’s definitely a disappointing report. It really was under any estimate you could find.”
The number crunchers also revised February’s job numbers downwards, meaning fewer jobs were created than they thought.
All this means the economy isn’t doing as well as we expected.
The harsh extended winter still plaguing the country’s Northeast has hurt retail and construction job numbers, as residents have been forced to stay inside and keep warm. Additionally, low oil prices, although a blessing at the pump, has hurt investment and hampered speculation nationwide.
Meanwhile, the U.S. is also enjoying a strong dollar, which sounds good but could actually mean trouble for American manufacturing jobs, as U.S. goods are now more expensive overseas.
To add to the trouble, there have also been several work stoppages across the country including at ports on the West Coast.
March’s poor jobs report doesn’t mean it’s all doom and gloom for the U.S. economy, however, as other factors still point to a recovering market.
Employee hourly earnings increased for the second time this year in March, according to the Labor Department, and while March’s unemployment remained steady, last week’s numbers hit a 15-year low, according to the New York Times.
McDonalds and Wal-Mart have also announced plans to increase wages.
Before the jobs report was released Friday, Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the New York Times that the low numbers of unemployment claims was positive news.
“The claims numbers simply do not support the idea that the first-quarter slowdown in growth is indicative of some underlying malaise in the economy.”
Consumer confidence also recovered in March and housing prices have continued to increase.
If the mix of good and bad news leaves you scratching your head, you’re not alone. Many of the predictions for the 2015 economy have already been turned on their heads, and no market analyst can say with confidence what the future holds.
There are some things everyone agrees on, however. March’s bad job report means the Federal Reserve will probably put off raising interest rates yet again.
That means savers won’t be earning much on those CD or money market funds and debtors can rest easy as their loan rates won’t increase.