Instant View: Employment jumps, jobless rate falls

NEW YORK Fri Apr 1, 2011 10:35am EDT

Related Video

Related Interactive

NEW YORK (Reuters) - U.S. employment recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8 percent, marking a decisive shift in the labor market that should help to underpin the economic recovery.

KEY POINTS:

* Nonfarm payrolls rose 216,000 last month, the largest increase since May, the Labor Department said on Friday. * January and February employment figures were revised to show 7,000 more jobs than previously reported.

COMMENTS:

SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK:

"The outcome is an improvement over last month. Last month looks like it still could have had some support from January from the bad weather, so this would then show pretty respectable underlying employment improvement.

"It is definitely another good step along the way showing there is improvement at a gradual pace. This is not super strong, nor is it a disappointment.

"Another aspect of the report was earnings, which were pretty much flat, so we are seeing the activity side of things increase but soft earnings still highlight that underlying inflation pressures are going to be restrained."

DAVID MANN, REGIONAL HEAD OF RESEARCH FOR THE AMERICAS, STANDARD CHARTERED, NEW YORK:

"It's slightly better than expected, but it's nothing to get too excited about. The market was more or less looking for 250,000 or more and that would have more of a lasting impact. But it's heading in the right direction. We're creating over 200,000 jobs and the unemployment rate is going down. We expect more to be created the rest of the year. It's definitely a short-term positive for the likes of dollar/yen and we also got a move in the dollar versus the euro."

HUGH JOHNSON, CHIEF INVESTMENT OFFICER OF HUGH JOHNSON ADVISORS LLC IN ALBANY, NY:

"There is not much that I can say that is really profound. Obviously these numbers, including the revision, are better than had been expected. They are very consistent with the view that the recovery is gaining some momentum. So the economy continues to recover, it's very good news. There are no significant surprises, but if there is a surprise, it is the decline in the unemployment rate from 8.9 to 8.8 percent. That is an indication the labor force is not expanding very rapidly.

"On balance though, you look through the numbers and it tells you pretty much what we already knew. There is widespread addition to payrolls with the exception of government. Government continues to, as expected, reduce jobs. These numbers are good numbers, they are better than expected, and it's not a surprise to me that the futures rose in response to these numbers."

"This is going to be a good day in the market, the trend in the market is up. It's hard to argue with the case that we have further to go in this bull market economic recovery cycle. It seems on pretty solid footing."

BERNARD BAUMOHL, MANAGING DIRECTOR AND CHIEF GLOBAL ECONOMIST AT THE ECONOMIC OUTLOOK GROUP IN PRINCETON, NEW JERSEY:

"The numbers are obviously good and one can hope that we will continue to see the market rise in continuing months. That said, there's a nagging concern that the job outlook may be in jeopardy as energy prices keep escalating because that will put a squeeze on household spending and business investments, and one has to wonder whether we'll see the pace of hiring slow as a result."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:

"The March non-farm payroll breakdown (payrolls up 216k, unemployment down 0.1 pct to 8.8 pct) was not far from consensus, but for the most part on the firm side, with the exception of ongoing weakness in average hourly earnings. This suggests the recovery is continuing, though weakness in average hourly earnings means growth in personal income is dependent on job growth, and provides some offset to commodity-led inflationary fears. Overall payrolls with a 216k rise were ahead of the consensus...with private firmer at 230k, private the strongest gain of the recovery to date which has clearly gained some momentum.

"For the Fed, this data should support perceptions that the recovery is now self-sustaining, but the weakness in average hourly earnings allows the doves to stress that surging commodity prices may mean only a modest pick up in overall inflation. This report is unlikely to resolve the differences of opinion at exist at the Fed."

MARKET REACTION:

STOCKS: U.S. stock index futures rise.

BONDS: U.S. bond prices extend losses.

FOREX: The dollar extends gains versus euro, climbs to more than three-month high against the yen

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (4)
Marcuscassius wrote:
This is the point where Republicans take all the credit for he last two years and the recovery while blaming Obama for slowing THEM down as THEY would have done it faster if only Obama hadn’t gotten it the way.

Then they’ll blame the depression on Democrats and rewrite history yet again making themselves the heroes.

They are some sad kittens.

Apr 01, 2011 9:20am EDT  --  Report as abuse
pburgdon wrote:
There were no gains.. Less people signed up for unemployment
because their unemployment ran out (For the second or third time)
and they were tired of trying to find work.

Apr 01, 2011 9:24am EDT  --  Report as abuse
HoozurGuy wrote:
I realize that the unemployment rate is probably the easiest benchmark to gage and compare to. But I do hope people realize the issue is much deeper, and admittedly more complex than I would even pretend to understand. As mentioned earlier, many on repeat unemployment have exhausted their eligibility and therefore skew the data. Another, and this one I know personally (26+ years in engineering), have been victim to downsizing and cutbacks, and are forced to accept stop-gap employment below their educational or experience level. Another factor is that many are having to relocate or commute farther because their once thriving place of employment has been forced to reduce labor costs or shut their doors. Hard to accurately quantify and wrap this data up in an easy-to-comprehend statistic.

Apr 01, 2011 10:39am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus