NEW YORK U.S. payrolls rose far less than expected in March, keeping the door open for further monetary policy support from the Federal Reserve, even as the unemployment rate fell to a three-year low of 8.2 percent.
NIGEL GAULT, CHIEF US ECONOMIST IHS GLOBAL INSIGHT
"Overall, it is disappointing if you think that the economy was strongly picking up. Probably January and February overstated the labor market growth, while March understated it. I think that numbers will be better in the coming months."
JEREMY LAWSON, ECONOMIST BNP PARIBAS, NEW YORK "The numbers were below expectations. What has driven the decline was the private services sector. This data is pretty consistent with the idea that it is pretty hard to maintain growth in payrolls without stronger economic growth. Now we are going into a key period in April and May because they are very strong hiring months in both payrolls and the household survey, so there is potential for more payback."
JENNIFER LEE, SENIOR ECONOMIST, BMO CAPITAL MARKETS
"It is tough to argue that an increase in U.S. employment is negative but the details make this report disappointing. Also (it) doesn't help that there were such high expectations ahead of the release. And, the U.S. economy has still lost 5.3 million jobs since the economy peaked back in December 2007. So there's a long way to go before we're 'normal.' But progress is slowly being made."
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON D.C.
"Clearly a disappointing number. Across the board it's kind of an underwhelming number. The question for the dollar is whether this is as viewed as an outlier in an otherwise improving trend in labor markets or if it's viewed as enough to revive talk of another round of Fed policy easing. At the very least it will keep the door open to additional policy easing more so than before the number was released. In that respect it's definitely a negative for the dollar. The extent of dollar losses is going to depend on how the market views this number, as an outlier or maybe evidence that the jobs growth is stalling. You've got to caution that it's one number and the overall trend in the last couple months is very positive."
THOMAS SIMONS, MONEY MARKET ECONOMIST, JEFFERIES & CO, NEW YORK
"This is not a horrible report, but it is weaker than the market has recently become accustomed to. Payrolls came in well lower than expected and the 121,000 increase in private payrolls is the lowest since August 2011. This is going to turn up the heat on the debate for QE3 since a deceleration in the economic data has been highlighted as a pre-requisite for such a program."
IAN LYNGEN, SENIOR GOVERNMENT BOND STRATEGIST, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT
"A lot weaker than expected and we are looking at the employment rate decline as primarily a function of the lower labor participation rate. It is a uniformly softer than expected report and this report is putting a bid into the Treasury market. We see 10-year yields 8 basis points lower and testing 2.10 (percent) and 2.11 (percent) and this is a meaningful technical move, the amount of upside that we have gotten here, and from here we will probably see a continuation of the trend."
JOE MANIMBO, SENIOR MARKET ANALYST, WESTERN UNION BUSINESS SOLUTIONS, WASHINGTON, D.C.
"It's a disappointment. I think it can be a catalyst for investors to book profit on the dollar's rally this week. It confirms worries that the job market looks set to slow in the months ahead, but I think it was helpful that the jobless rate unexpectedly declined by a tick. I think it highlights the fact that the Fed's door is still open to more asset purchases this year."
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK
"Right now this is going to keep the Fed in easy policy mode. They're going to want to see a step toward 300,000 before they start to think about seeing a stronger outlook for the economy. On the positive side we did see another drop in the unemployment rate, but this should largely be offset by the disappointing headline number from payrolls."
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
"The deceleration of improvement in the labor market seen in March's employment report with payrolls under-performing market expectations growing by just 120k last month and the unemployment rate slipping to 8.2% entirely because Americans left the labor force confirms arguments that a mild winter had propped prior payroll values and the expectation that forthcoming reports would show a "letdown" from the influence of warm weather supporting activity. Forecasts expected 203k payrolls and the unemployment rate to stay at 8.3%."
STOCKS: S&P 500 futures drop sharply.
BONDS: U.S. Treasury debt prices turn higher.
FOREX: Dollar turns lower versus euro.
(Americas Economics and Markets Desk; +1-646 223-6300)