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US job growth weakest since 2013; unemployment rate steady
[WASHINGTON] US employers added the fewest jobs in more than a year in March amid signs the economy was starting to take strain from a strong dollar and lower oil prices, which could delay an anticipated interest rate increase from the Federal Reserve.
Nonfarm payrolls increased 126,000 last month, the smallest gain since December 2013, the Labor Department said on Friday. The goods producing sector, which had been hurt by a strong dollar, shed 13,000 jobs last month, the largest drop since July 2013.
March's tepid increase in payrolls ended 12 straight months of job gains above 200,000, which had been the longest streak since 1994. In addition, data for January and February was revised to show 69,000 fewer jobs created than previously reported, giving the report an even weaker tone.
Economists polled by Reuters had forecast payrolls increasing 245,000 last month. The small job gains could fan fears that the recent weakness in economic activity could be more fundamental rather than the result of transitory factors.
There was no sign that the weather had impacted the payrolls gain, though construction employment fell.
The labor market had largely shrugged off a harsh winter, a buoyant dollar, weaker global demand and a now-resolved labor dispute at West Coast ports, which have combined to undermine economic activity in the first quarter.
Growth braked sharply over the past three months. Gross domestic product estimates are as low as a 0.6 per cent annual pace for the first quarter, but the slowdown is expected to be temporary.
There was some good news in the report.
Average hourly earnings, which are being closely watched for clues on the timing of a Fed rate hike, increased seven cents, leaving the year-on-year gain at 2.1 per cent.
The unemployment rate held at a more than 6-1/2-year low of 5.5 per cent, as people left the labor force.
With Wal-Mart and McDonald's announcing pay increases for their hourly workers, wage growth could gain some traction in the months ahead. Other companies, including TJX Cos Inc and health insurer Aetna, also have announced wage increases.
The US central bank has sounded keen to raise overnight interest rates, which it has kept near zero since December 2008. But the economy's recent softness has led investors to push back bets on the rate lift-off. Some believe the Fed could even wait until 2016.
Private payrolls increased 129,000 last month, slowing from 264,000 in February. Employment growth was held back by a decline in the goods producing sector payrolls. Construction employment fell 1,000. Manufacturing, which has been hit by the strong dollar and softer global demand, reduced payrolls by 1,000. Government employment fell 3,000.
The mining sector saw more job losses last month, with payrolls falling 11,000. That reflected ongoing losses in oil and gas extraction, which has taken a hit from lower crude oil prices.