The American employers have hired the fewest number of employees in over a year in the month of March, triggering concerns over the recent economic growth slowdown and further delaying the much-anticipated interest rate hike by the Federal Reserve Bank.
The Labor Department on Friday said that the nonfarm payrolls increased 126,000 in March. This is the smallest addition of jobs since December 2013.
The goods producing sector, which has witnessed a setback by lower prices of crude oil and a strong dollar, shed 13,000 jobs last month. This is the largest decline since July 2013.
The rate of unemployment held at over 6-1/2-year low of 5.5 percent as people dropped out of the labor force.
Jim Baird, chief investment officer at Michigan-based Plante Moran Financial Advisors, said, “There’s no question that the economy is showing the negative effects of the collapse in crude oil prices and the stronger dollar. Corporate profits have come under pressure, and hiring has been adjusted in response.”
Several economists had projected payrolls rising 245,000 in March and the rate of unemployment remaining at 5.5 percent.
The US government debt prices increased, thanks to the investors who pushed back their expectations for an interest rate hike by the Federal Reserve this year.
The greenback dropped against a basket of currencies. On the other hand, US stock index futures also tumbled.
The US central bank has appeared interested in raising its major overnight rate of lending, which has been kept near zero since December 2008. However, the recent softness of the economy has led the investors to push back bets on the lift-off of the rates. Some are expecting the Fed may defer the rate hike until 2016.
The tepid rise in payrolls last month ended 12 consecutive months of job gains above 200,000. This has been the longest streak since 1994. Additionally, the data for both January and February was revised to show 69,000 fewer employment opportunities created than earlier reported, giving a weaker tone to the jobs report.