This was the smallest gain since December of 2013. The report of only 126,000 new jobs will likely delay the gradual hike in interest rates by the U.S. Federal Reserve.
A slowdown in the sector of manufacturing impacted by the strong U.S. dollar, lower prices of crude oil and severe late winter weather might have dragged on businesses when it came to hiring as hospitality and leisure sectors recorded a steep slowdown in growth of jobs.
While the unemployment rate held steady at 5.5%, which is a low of over six years, the overall size of the workforce shrank. The participation rate of the labor force returned to a low of 36-years reached late in 2014.
An economist said the new jobs report confirms a narrative that is emerging of slowing momentum in growth seen through other economic indicators, which will weaken an argument for a rate hike midyear.
The dollar has increased in value close to 13% against a host of other worldwide currencies since mid June of 2014. Economists said the impact was equivalent to a hike in interest of one-half point.
The sharp drop in oil prices has also curtailed drilling activity in the U.S. Construction employment has been curtailed as payrolls in mining fell by over 11,000, which indicated an ongoing slowdown of gas and oil extraction. Producers of energy have shuttered many oilrigs since the start of October of last year.
The severe weather during late winter of last year and the now settled dispute at ports along the West coast weighed heavily on activity along with a weaker demand globally. It was estimated that bad weather cut off up to seven-tenths of one percent from growth during the first quarter.
Some positive news did come from the report. The average earnings per hour were up by 0.35, However that lifted the gain to 2.1% for year on year, which is the same range that earnings growth has been for a number of years.
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