US Hiring Slumps in March - Jinz Haiggh Blog

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US Hiring Slumps in March

The US labor market has been gaining quite a bit of momentum over the past few months. However, the data that was released in March by the government authorities shows a big slump with inclusive numbers for the government and the private sector adding up to 98,000 jobs, which is the lowest gain that we have seen over the course of the year. It’s easy to say that winter storms can be seen over the economic activity within the country, especially with the decisions that are being made at the upper echelons. 

The chief economist of S&P Global Ratings, Beth Ann Bovino, stated that the numbers were a sore disappointment. However, she was also quick to add that the lower numbers were probably caused by factors that could be deemed temporary, such as the changes in the weather. She also added that the numbers don’t exactly provide a fair representation, especially because they have been quite positive in the past few months. It seems that businesses are taking a small break from hiring, she added.

However, other data that was released last Friday depicted a much brighter picture of the labor markets which strongly suggests that the rough month of March might be nothing more than a ripple in what can be considered largely stable economic waters. It’s unlikely that this could be deemed as the first signs of serious economic trouble within the country.

Unemployment Falls

Another positive to be taken from the numbers released by the government is that the unemployment rate dipped from 4.7% to 4.5% in the month of February. As more and more people are able to land jobs, it’s also taken the load off of companies that offer guarantor loans such as Buddy Loans. It’s expected that interest rates charged by these companies will be slightly reduced as well within the near future to attract more customers. However, there’s also a major positive hidden amongst these stats: the figures also include numbers for people who have given up looking for work as well as those who are employed part-time but would like a full-time job. Those took a sharp dip as well, setting up at 8.9%.

As the market closed on Friday, the impact wasn’t much; the Dow Jones Industrial Average ended the day at a deficit of 0.03% whereas the S&P’s 500 stock index fell by 0.08% as the market came to a close on Friday. Economists across the country were completely surprised by the strong numbers reported by the government with forecasts coming in way below than what had been predicted. February was one of the second-warmest months on record and the effects of the weather were clearly felt in the construction industry as it added more jobs than it had in the overall decade. 

Business and Professional Services Lead the Line

Most of the hiring was done in the professional and business services industry, which hired more than 56,000 people in different jobs across the board. Apart from that, the mining sector as well as the healthcare sector saw strong increases as well. However, a small blip on the report was caused by the retail industry, which actually cut off around 30,000 jobs in the month of March. Many economists believe that the colder weather could have played a role in this, though some economists state that this could be caused due to changes that are being made on a much larger scale such as the rise of online platforms such as Amazon, which are having a serious impact on brick and mortar shops.
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