For out-of-work Americans, it may seem like one big April Fool's Day joke. Just when it appeared as if hiring was improving, the job market disappointed economic forecasters again.
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The Labor Department reported this morning that the economy created only 110,000 new jobs in March. That was only half the number that many economists had been predicting, and it was less than half of the 243,000 jobs established in February. "The employment report did what it does best—come in well outside expected ranges," said Citigroup senior economist Steven Wieting.
While Wieting said the 110,000 new jobs "was no disaster," it probably means that February's robust job creation figure was the anomaly. "Over the past six months, nonfarm payroll gains averaged 174,000, and future gains will likely average close to that trend, with the typical wild swings around it, we believe," he said.
There was a silver lining to this somewhat dark cloud, however. The nation's overall unemployment rate fell from 5.4 percent in February to 5.2 percent in March, the lowest levels since the 9/11 terrorist attacks in 2001.
Moreover, the weaker-than-expected jobs report also eased some fears of inflation hawks, who are growing increasingly concerned that inflation will shoot up once wages rise. And wages typically rise in a hot labor market. The March jobs report found that even with tepid hiring, average hourly wages jumped 0.3 percent last month, which was slightly higher than expected.
Nevertheless, the modest job creation figures sparked a minor rally in the bond markets, which pushed bond yields lower. The yield on 10-year treasury notes slid from 4.62 percent earlier in the week to 4.49 percent in midafternoon trading Friday.
