posted on April 8, 2007 12:02:04 PM newJobs much stronger than expected
Growth in payrolls well above forecasts, unemployment rate drops; Fed seen on hold.
April 6 2007: 9:45 AM EDT
NEW YORK (CNNMoney.com) --
Job growth jumped and unemployment dipped unexpectedly in March, the government reported Friday, signs the labor market is holding up better than economists had thought.
Employers added 180,000 jobs to payrolls last month, the Labor Department reported, up from 113,000 in February, which was also revised higher. Economists surveyed by Briefing.com had forecast a gain of 135,000 while Reuters' survey showed a consensus for 120,000.
The unemployment rate dipped to 4.4 percent - the lowest since October - from 4.5 percent in February.
Economists had bet the rate would creep back up to 4.6 percent. October and March are the only two months since May 2001 that unemployment has been this low.
The unemployment rate for college graduates is down to 1.8 percent.
"I think this is really encouraging.
It shows that employers were in a hiring mode," said Rich Yamarone, director of economic research at Argus Research. "We're not going to have blistering job growth. But the nation is (essentially) at full employment."
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Manufacturing was one of the only sectors showing weakness, losing 16,000 jobs last month.
Even the battered automotive sector saw employment levels remain essentially unchanged.
Professional and business services lost 7,000 jobs.
But construction, which many had feared would show a seasonally adjusted decline due to continued slowdown in home building, picked up, adding 56,000 jobs.
There was some weakness in residential construction, as home contractors trimmed 1,200 jobs, but the subcontractors they employ added 11,000 jobs.
Retailers added 36,000 jobs despite weakness at auto dealers, furniture stores and building material stores, all hurt by the troubled auto and housing markets.
But department stores, clothing retailers, electronics chains, groceries and gas stations added jobs.
Average hourly wages rose 0.3 percent to $17.22, in line with forecasts and down from the 0.4 percent increase posted in February. That left wages up 4.0 percent over the last 12 months, meaning typical hourly workers are seeing their paychecks grow faster than prices.
A separate Labor Department reading shows a 2.4 percent increase in prices in the 12 months ending in February.
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Friday marked the rare holiday release of the government's most closely watched economic report.
Stock markets in the U.S. and Europe are closed for Good Friday, giving investors more limited ability to react to the number.
But the bond market was open, and Treasury bond prices tumbled, taking the yield on the 10-year note up to 4.74 percent from 4.67 late Thursday as investors bet the strong numbers significantly reduced the chance that the Federal Reserve would cut interest rates later this year.
Yamarone said that even with the unemployment rate falling and wages continuing to creep up, he doesn't believe the Fed will feel a need to raise rates at any point in 2007, and it certainly won't cut rates.
"The inflation barometers are all exceeding their comfort zone, but they're not upending the economy," he said.
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More on what the labor market means to you and the economy
Employers added jobs at a faster pace in March, according to the government's latest reading of the labor market that came in much stronger than forecasts.
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NOW, if the liberals in our newly elected congress will just renew the Presidents tax cuts since they've PROVEN to have kept our economy growing....we'll continue on this positive growth.
But if they do as they've said they plan to do.....increase our taxes, continuing spending at outrageous rates AND let the tax cut benefits expire....we'll be living with a much worse economy.
Let them know, by letters - emails - faxes - phone calls....you don't WANT tax increases....and you'd like to see the renewal of the tax DECREASES we've all be enjoying.
