The economy added 98,000 jobs in March, postponing fulfillment of President Donald Trump’s pledge to put Americans back to work.
March’s jobs numbers were a substantial decrease from February, when the economy added 219,000 jobs. Unemployment was 4.5 percent, down from February’s 4.7 percent. Average private sector earnings were up 2.7 percent over the previous year. In February, they were up 2.8 percent over the previous year.
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Analysts surveyed by Bloomberg had predicted the creation of about 175,000 jobs and an unemployment rate of 4.7 percent. The payroll company ADP estimated Wednesday based on its own records that March job growth in the private sector was 263,000.
The jobs report is bad news for Trump as he struggles to recover from the defeat of Obamacare repeal, multiple brewing investigations into his presidential campaign’s contacts with Russia and reports of debilitating rivalries among White House staff and in the agencies. Trump’s approval rating stands at about 40 percent, according to a poll average calculated daily by FiveThirtyEight.com. That’s lower than for any other president at this stage, going back to President Harry Truman.
The weak job-growth figure may be a sign that employers, taking note of these stumbles, hesitate to expand hiring until they get a clearer signal that Trump can deliver promised tax cuts, deregulation and his $1 trillion infrastructure program.
Even Republicans acknowledged the March jobs report was disappointing. House Ways and Means Chairman Kevin Brady (R-Texas) said “it’s clear there is a lot of work to do to strengthen our economy." He said that improving economic growth "starts with overhauling our uncompetitive tax code" and pledged to work with Trump on tax reform.
The Federal Reserve may yet slow job growth still further. According to minutes from the Federal Open Market Committee’s March meeting, the Federal Reserve expects to start shrinking its balance sheet this year. "Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee’s reinvestment policy would likely be appropriate later this year,” the minutes said. Further rate hikes will likely slow economic growth.
Friday’s jobs report took some analysts by surprise. "What a number," Naeem Aslam, chief market analyst at ThinkMarkets told CNBC. "This makes your jaw drop."
But Elise Gould, senior economist at the left-leaning Economic Policy Institute, said March’s disappointing jobs numbers were "likely a blip in an otherwise solid report." She attributed the deceleration "in part to seasonal adjustments not capturing the early March winter storms and a mild pullback after February’s strength and unusually mild weather." Gould noted that while the unemployment rate declined, the Federal Reserve should refrain from further raising interest rates until the economy reaches full employment.
The jobs report followed news from the Commerce Department last week that GDP increased 2.1 percent during the fourth quarter of 2016. That was lower than the third quarter’s 3.5 percent but higher than the second quarter’s 1.4 percent and the first quarter’s 0.8 percent. For the year, GDP increased 1.6 percent, down from 2.6 percent in 2015 and 2.4 percent in 2014. The Commerce Department’s first cut at estimating first quarter growth will be released April 28.
Labor force participation remained low at 63 percent, unchanged from February and close to its lowest level since the 1970’s.