The U.S. unemployment rate is now at the lowest it has been since May 2007. The latest U.S. employment figures for March were less than expected but the U.S. economy appears to be creating jobs at a pace which exceeds population growth. According to the U.S. Bureau of Labor Statistics, only 98,000 jobs were created in the non-farm sector in March against expectations of 180,000. Poor winter weather and a shift to online retailing has been put forward as the cause of the lower-than-expected number of jobs created.
After revisions to previous months’ figures, the unemployment rate fell from 4.7% to 4.5% as the participation rate remained steady at 63.0% and the employment-to-population ratio rose 0.1% to 60.1%. The U.S. has not had a negative employment growth figure since September 2010 or 78 months and these latest figures will provide ongoing pressure for higher official interest rates.
ANZ described the report as “it’s not all bad” while AxiTrader’s Greg McKenna pointed out the increasing difficulty of creating 200,000 jobs when an economy is at, or close to, full employment.
Market reaction was mild but economic data releases were overshadowed by the fallout from U.S. strikes against a Syrian airbase. US 2 year and 10 year bond yields both rose 4bps to 1.28% and 2.38% respectively.