Blow for US recovery as fewer jobs are created

Worries over revival's momentum as increase in non-farm payroll is slowest since October

The recovery hopes of the US economy hit a setback yesterday as employment figures showed far fewer jobs were created in the country last month than expected.

The keenly watched non-farm payroll numbers from the Labor Department showed an increase in the jobs market during March of 120,000, despite many economists having predicted a rise of more than 200,000.

After a run of encouraging releases over the past few months, this was the lowest increase since October, raising fears over the momentum of the country's economic recovery.

The Labor Department also said the unemployment rate had dropped to 8.2 per cent, its lowest for three years, although this was the result of a fall in the number of people looking for work.

The employment figures are expected to add to the pressure on the US Federal Reserve to provide a boost to the economy by introducing further quantitative easing measures.

Minutes released last Tuesday from the latest meeting of the Federal Open Market Committee seemed to show members moving away from another round of bond buying.

However, yesterday the price of US government debt rose on hopes the data will increase the likelihood of additional quantitative easing. Thomas Simons, an economist at Jefferies, claimed the numbers would "turn up the heat on the debate for QE3 since a deceleration in the economic data has been highlighted as a prerequisite for such a programme."

Yesterday's release revised the number of jobs added in February from 227,000 to 240,000 while lowering January's total from 284,000 to 275,000. The subsequent fall in March was being seen as further evidence that the mild winter in the US helped support employment figures for the previous months.

The strong run of data had given a boost to President Barack Obama's chances of winning re-election in November, although the latest release will cause his campaign concerns.

President Obama said he welcomed the figures, but added that it was "clear to every American there will still be ups and downs along the way".

The White House's economic adviser Gene Sperling responded to the release by saying that although the economy was "making progress ... we still have a long way to go".

He went on to attack the Republicans in Congress, saying "partisanship ... has blocked us from having a stronger job market".

Cambridge Mercantile's Jason Conibear argued the figures were not a "downer", saying: "We can't expect miracles, the main thing is that there's still forward momentum. The US economy is by no means tanking here".

Michael Gapen from Barclays said that given "the report reflects only one month of data and some of the underlying cyclical sectors registered payroll gains, we do not view it as conclusively signalling a shift to a lower trend rate of employment growth". While US markets were closed for Easter and Passover, stock futures dropped in response, suggesting stocks will come under pressure when trading resumes on Monday.

Start your day with The Independent, sign up for daily news emails
A daily miscellany of general election facts, figures, trivia and traditions
voicesThere's still time for someone to do something to make us care
Life and Style
Arts and Entertainment
Michael Corleone, played by Al Pacino, goes back to his family's Sicilian roots in the first 'Godfather' film
Kim Kardashian speaks on the Today show about her step-father's transition
Wenger and Mourinho square-up to each other earlier this season
sportAll the action from today's Premier League, including Everton vs Man Utd and Chelsea vs Arsenal
Tepper had a stunningly successful career as a songwriter
Arts and Entertainment
Len Blavatnik
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions