6 April 2001, 16:59 US Jobs Report-OVERVIEW
--US March payroll jobs -86,000; jobless rate +0.1 pt to 4.3%
--US March job decline largest since November 1991
--US March avg hourly earnings +0.4%; February revised to +0.6%
--US March avg hourly earnings +4.3% from yr ago; Feb revised to +4.2%
--US March available labor pool down to 10.3 mln; Feb 10.4 mln
--US March workweek +0.1 hr; manufacturing workweek unchanged
--US March weekly hours index +0.1% to 151.4; factory index -0.5%
--US Feb payroll jobs revised to +140,000 from +135,000
--US Jan payroll jobs revised to +289,000 from +224,000
--US March factory jobs -81,000
--US March construction jobs +12,000; govt -4,000
--US March retail jobs -46,000; service producing -19,000
--US March jobless rate highest since July 1999
By Simon Kennedy
Washington, April 6 (BridgeNews) - The U.S. jobs market weakened
further in March with non-farm payrolls plunging 86,000, their steepest
drop since November 1991. Manufacturers and retailers shed staff to force
the unemployment rate up to 4.3%, the highest since July 1999, the Labor
Department reported Friday. Average hourly earnings rose 0.4%, slowing
from the revised 0.6% increase in February.
* * *
Analysts had projected a 50,000 increase in jobs, a 0.3% rise in
average earnings and an unemployment rate of 4.3%. In February, payrolls
climbed a revised 140,000, while the unemployment rate was at 4.2%.
The slumping manufacturing sector cut payrolls for the eighth straight
month, trimming them 81,000 in March, with declines through all
manufacturing industries, Katharine Abraham, head of the Bureau of Labor
Statistics, said.
Meanwhile, retailers reduced payrolls by 46,000, the first decline
since September. Government jobs were cut by 4,000, while wholesale
traders trimmed 2,000 positions to extend their cutting period to four
months.
However, the construction industry created 12,000 new jobs, and
services hired 11,000 more. Service employment was largely depressed by a
sharp decline in help supply services, an industry composed mainly of
temporary help firms, Abraham said.
The much weaker March jobs data reflects a faltering economy and
follows announcements of huge corporate layoffs from the likes of Cisco.
"Our March survey results provide further indication of weakness in
the labor market," Abraham said.
Previously, firms had tried to cope with the stumbling economy by
leaving payrolls alone and cutting on worker hours instead.
In March, the average workweek rose 0.1 hour to 34.3 hours, but the
manufacturing workweek was unchanged at 40.7 hours, and factory overtime
was cut by 0.1 hour to 3.8 hours.
The tightness of the labor market in recent years--with the jobless
rate hitting a 30-year low of 3.9% last year--has been critical to the
success of the economy. Its failure to slacken markedly despite the fact
the economy grew just 1.0% in the final quarter and is anticipated to have
expanded just 0.6% in the January-March period, has helped underpin
consumer confidence as crumbling stock prices and bleak economic news
elsewhere has unsettled sentiment.
However, if the labor market continues to ease, households could begin
to curb spending, knocking the economy and forcing the Federal Reserve to
cut interest rates further.
The central bank has already lopped borrowing costs by 150 basis
points since Jan. 3 and is expected to do so again in coming months as
it strives to avert the first recession in just over a decade.
Despite some evidence that the labor market is loosening, the labor
utilization pool, representing the sum of those employed and those who say
they want a job but are not actively seeking work, fell to a seasonally
adjusted 10.3 million from 10.4 million in February.
WHAT WAS EXPECTED:
March non-farm payroll growth was much weaker than private estimates
in the BridgeNews survey, which ranged from down 30,000 to up 130,000.
Expectations for the unemployment rate were 4.2 to 4.4%, while
estimates for average hourly earnings ranged from up 0.1% to up 0.4%.
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