March U.S. job report indicates possible interest rate
March U.S. job report recorded consecutive growth despite a weak economy, suggesting the probability of an interest rate hike this year.
Nonfarm payrolls rose by 245,000 in March as compared to 295,000 in February.
Since March witnessed the 13th consecutive job growth, it is the most successful period in the U.S. economy since late 1993.
The labor market had to go through unfavorable conditions which it was able to overcome so that to prosper.
These conditions include a difficult winter season, a resilient dollar and a decreasing global demand.
All these affected the economic activity in the year’s first quarter.
Despite the fact that growth has slowed down during the last three month, this deceleration seemed to be short-lived.
According to Joel Naroff, chief economist at Naroff Economic Advisors, the quick recovery would prove that economy was temporarily slowed due to weather-reasons and not because it was flawed.
The unemployment rate seems to remain steady at a more than 6-1/2 year low of 5.5%.
According to Ryan Sweet, a senior economist at Moody's Analytics, the economy needs to create between 100,000 and 120,000 jobs a month to match population growth and to assimilate what is lacking in the jobs market.
The U.S. central bank had kept the interest rates to almost zero but now it sounds more eager to raise interest rates overnight.
However, the economy's recent crisis has encouraged investors to take off bets on interest rates’ hike.
There are assumptions that the Fed could wait until 2016.