Updated at 10 a.m. ET
The U.S. economy gained just 126,000 jobs in March, a figure well short of economists’ expectations and the weakest growth since December 2013, the Labor Department reports. The unemployment rate held steady at 5.5 percent.
The consensus among economic forecasters had been for 245,000 new jobs, which would have continued a 200,000+ monthly streak that has been the longest such spurt of job growth since the early 1990s. Over the last year alone, the U.S. economy has added 3 million jobs.
Robust jobs numbers from January and February were also revised downward by 69,000 total, according to the monthly Employment Situation Survey.
The labor participation rate remained nearly unchanged.
Jason Furman, chairman of the Council of Economic Advisers said in a statement that: “A range of factors including the weather and the global economic slowdown have affected economic data for the first quarter. The President has been clear that he will continue to push for policies including investments in infrastructure and relief from the sequester that would help ensure the strong underlying longer-term trends persist.”
Despite the tepid news, average monthly salaries for nonfarm payrolls in March were up slightly, 7 cents to $24.86. The average hourly earnings of private-sector and nonsupervisory employees rose by 4 cents to $20.86.
The latest report bucks a trend that the BLS says saw an average of 269,000 new jobs per month in the previous 12 months. However, with Friday’s revisions factored in, the average for the last three months has been 197,000.
The Associated Press notes: “Economic growth has been hammered this year by winter weather, factory slowdowns and lackluster construction activity. The manufacturing, construction and government sectors each shed workers, while hiring at restaurants plunged from February.”
Wall Street will have a long weekend to ponder the meaning of the latest employment figures because markets are closed today for Good Friday. But, the apparent deceleration in hiring could cause the Federal Reserve to hold off on raising interest rates.
Economist John Canally of LPL Financial tells NPR’s John Ydstie that what “the Fed wants to see, or hopes to see, is that all this growth in the job market will eventually begin to push up wages. And then wages are a prerequisite to get any kind of inflation to stick. So until you get some wage inflation, you’re not likely to get very much overall inflation in the economy.”
Sectors that added jobs in March include professional and business services (40,000); retail trade (26,000) and health care (22,000). By contrast, mining lost 11,000 jobs.
Canally says there was weakness in weather-related sectors such as construction, amusement, accommodations and food.
“With the port strike over, the weather improving, and most of the oil patch cap ex cuts behind us, the labor market is likely to re-accelerate in the coming months,” he says.