In March, the US labor market encountered a significant slowdown, marking its lowest growth rate since December 2013, as reported by the Labor Department here. Only 129,000 jobs were added last month, a stark contrast to the anticipated gain of 240,000 projected by economists via Econoday.com, and a downward revision from February’s 264,000 job gain.
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● US jobless claims decreased by 20,000 to 268,000, nearing a post-recession low | MarketWatch
● The rate of job cuts in the US slowed notably in March | Challenger
● US factory orders rose in February, breaking a six-month downturn | USN&WR
● Atlanta Fed’s Q1 GDP forecast for the US drops to 0% | Atlanta Fed
● US mortgage rates remain stable as spring buying season commences | RTT
● China’s services sector expanded in March, with job growth at a ten-month low | Reuters
In tomorrow’s March update from the Labor Department, private nonfarm payrolls in the US are forecasted to rise by 256,000 (seasonally adjusted), based on The Capital Spectator’s median point forecast across various econometric estimates. This monthly estimate indicates a notable slowdown compared to the 288,000 jobs added in February.
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Today’s report on new unemployment benefit claims in the US delivers encouraging news following yesterday’s disappointing private payroll numbers for March from the ADP Employment Report. While the ADP report indicates a slowdown in labor market growth, initial claims figures show a contradictory trend. Claims unexpectedly dropped by a substantial 20,000 to a seasonally adjusted 268,000 for the week ending March 28—close to a post-recession low. If there are issues within the labor market, the claims data do not reflect this.
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The anticipated risk premium for the Global Market Index (GMI) has decreased in the March estimate. GMI, an unmanaged, market-value-weighted aggregation of the major asset classes, is expected to yield an annualized 3.8% over the risk-free rate in the long term. This updated estimate, derived from data through the end of last month, has fallen 20 basis points from the previous month’s projection of 4.0%.
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● ADP: Sharp slowdown in US private sector job growth for March | LA Times
● US construction spending declines for the second consecutive month in February | Housingwire
● Concerns over US growth cause cooling in the dollar rally | Reuters
● ISM: US manufacturing growth in March at its slowest pace in nearly two years | IW
● PMI: Significant improvement in US manufacturing conditions in March for the first time in five months | Markit
● US auto sales slow after a strong growth period | NY Times
● US mortgage applications surge due to spring demand at the end of March | CNBC
● PMI: Global manufacturing grows at a moderate pace in March | Markit
According to the latest ADP Employment Report, job creation in the private sector slowed more than expected last month. Economists predicted an addition of 230,000 jobs, according to the consensus forecast from Econoday.com, but only 189,000 new workers were hired in March. This decline diminishes the belief that the US economy is accelerating, although the year-over-year trend remains robust enough to support a moderate growth outlook.
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March proved to be a challenging month for profit generation in global markets. Gains (in US dollar terms) in the major asset classes were primarily restricted to US bonds and real estate investment trusts (REITs), which rebounded sharply after a steep decline in February. In fact, US REITs (MSCI REIT Index) topped the performance charts in March, achieving a total return of 1.8%. Conversely, most other sectors faced losses.
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● Consumer confidence surged in March: Conference Board | CNBC
● US home prices increased 4.6% year-over-year through January: S&P Case-Shiller Index | Reuters
● US store sales up 1.2% in March compared to February: Redbook Index | MNI
● Manufacturing growth in the Eurozone revised higher, aided by Germany | Bloomberg
● China’s factories showed gains in March, though still weak overall | WSJ
● UK factory growth reached an eight-month high | RTT
● Analyzing low interest rates: Secular stagnation explained | Ben Bernanke
In the upcoming March update of the ADP Employment Report, private nonfarm payrolls in the US are expected to increase by 213,000 (seasonally adjusted), according to The Capital Spectator’s median point forecast based on multiple econometric models. This median projection indicates a modest increase compared to the rise seen in February.
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The recent data from the US labor market suggests mixed signals about economic growth. While job creation has slowed down, other indicators like decreasing jobless claims and an uptick in consumer confidence point to resilience. As we move forward, the interplay of these factors will be crucial in determining the trajectory of the economy.
