Tags: UniCredit | Bandholz | Health | Labor | Market

UniCredit's Bandholz 'Not Worried About Health of Labor Market'

Image: UniCredit's Bandholz 'Not Worried About Health of Labor Market'
(iStock Photo)
 

By    |   Friday, 07 Apr 2017 11:36 AM

Many economists refused to be shaken after U.S. job growth slowed sharply in March amid continued layoffs in the retail sector.

A drop in the unemployment rate to a near 10-year low of 4.5 percent suggested labor market strength remained intact.

Nonfarm payrolls increased by 98,000 jobs last month, the fewest since last May, the Labor Department said on Friday.

Job gains, which had exceeded 200,000 in January and February, were also held back by a slowdown in hiring at construction sites, factories and leisure and hospitality businesses, which had been boosted by unusually warm temperatures earlier in the year.

In March, temperatures dropped and a storm lashed the Northeast, and economists said bad weather accounted for the stepdown in hiring. The two-tenths of a percentage point drop in the unemployment rate from 4.7 percent in February took it to its lowest level since May 2007.

"We are not worried about the health of the labor market," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. "After unusually mild conditions had boosted employment gains during the past few months, we now witnessed a payback, as temperatures normalized and a snowstorm hit some parts of the country."

While the bigger establishment survey showed fewer jobs created last month, the smaller and more volatile survey of households showed employment increased 472,000. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

The labor market is expected to hit full employment this year. Economists polled by Reuters had forecast payrolls increasing 180,000 last month and the unemployment rate unchanged at 4.7 percent.

Given rising inflation, the moderate job gains and gradual wage increases could still keep the Federal Reserve on course to raise interest rates again in June.

The U.S. central bank lifted its overnight interest rate by a quarter of a percentage point in March and has forecast two more hikes this year. The Fed has said it would look at how to reduce its portfolio of bond holdings later this year.

"I think for the Fed, it doesn't change all that much in the near-term outlook. They were not going to go in May, and there are still going to be two more employment reports before the June meeting," said Mark Cabana, head of U.S. short rates strategy at Bank of America Merrill Lynch in New York.

(Newsmax wires services contributed to this report).

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Economy
Many economists refused to be shaken after U.S. job growth slowed sharply in March amid continued layoffs in the retail sector.
UniCredit, Bandholz, Health, Labor, Market
406
2017-36-07
Friday, 07 Apr 2017 11:36 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved