March job growth strong, jobless rate falls
WASHINGTON (Reuters) - U.S. employers added a stronger-than-expected 180,000 new jobs in March and the unemployment rate fell to a five-month low, implying the economy remains durable despite a slowdown in housing.
Friday's intently awaited report on hiring from the Labor Department also showed job growth was stronger in both January and February than previously thought.
The March unemployment rate dropped to 4.4 percent from 4.5 percent in February, its lowest level since a matching 4.4 percent in October.
The last time the unemployment rate was lower was nearly six years ago, in May 2001 when it touched 4.3 percent.
Analysts said the job figures implied the economy was on its way toward a successful "soft landing" in which growth slows enough to contain inflation but does not sink into a punishing downturn.
"The healthy data again hints at limited housing contagion spreading through the economy," said Alan Ruskin, chief international strategist for RBS Greenwich Capital in Greenwich, Conn..
He added that "even allowing for monthly noise (it) is likely to play further against expectations of Fed (Federal Reserve) easing in the late summer and beyond."
There were soft spots, with manufacturers shedding another 16,000 jobs in March and information-processing industries dropping 5,000.
But interest rate futures showed the market perceived less chance of an interest rate cut in the near future, with the implied probability of a cut in June falling to 12 percent from 20 percent before the jobs data was released.
Stock markets were closed for the Good Friday holiday but U.S. Treasury bond prices fell on reduced prospects for interest-rate reductions.
The bond market closed early at 11 a.m. EDT (1500 GMT) but the benchmark 10-year note traded 18/32 lower in price to yield 4.76 percent compared with 4.68 percent late on Thursday.
Five year-notes fell 14/32 and their yield climbed to 4.67 percent from 4.57 percent late on Thursday, while 30-year bonds traded 23/32 lower for a yield of 4.93 percent, up from 4.88 percent.
The dollar strengthened on the indication of job market strength that analysts said bodes well for sustaining consumers' incomes and spending, even if the overall pace of economic activity is easing.
"This report is consistent with the idea that the U.S. job market remains solid and that economic growth by no means is going to drift down to recessionary levels," said Stuart Hoffman, chief economist for PNC Financial Services in Pittsburgh.
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