Growth fear as pace of US jobs hiring takes a dip

Economic growth in America has taken a hit. Picture: Getty

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A COOLING United States economy spilled into the jobs market in March as employers added 126,000 jobs, the lowest total since December 2013, ending a run of 12 straight months of gains above 200,000.

Releasing closely-monitored non-farm payroll numbers yesterday, the US labour department said that the nation’s unemployment rate remained at 5.5 per cent.

Economic growth has been hit this year by harsh winter weather, factory slowdowns and lacklustre construction activity. The manufacturing, construction and government sectors each shed workers, while hiring at restaurants plunged from February.

In addition to reporting the sluggish rate of hiring in March, officials revised down estimates of job gains in February and January by a combined 69,000. Wage growth in March remained modest.

Any continued weakening in hiring could delay the Federal Reserve from raising interest rates around the middle of the year.

The Fed signalled last month that it would be cautious in hiking borrowing costs from record lows. It has yet to rule out a June rate hike but many on Wall Street expect the first increase no earlier than September.

Janet Yellen, head of the US central bank, has stressed that even when the Fed begins raising rates, it will do so only very gradually.

A rate hike would point to stable growth. However, the economy has weakened in the first two months of 2015, in part because of the tough winter.

The Atlanta Federal Reserve estimates that growth was flat during the first three months of 2015.