US market index futures plunged after March’s nonfarm payrolls came well below analyst expectations at a dismal 126,000.
The report, released by the Labor department showed that non-farm jobs grew by 126,000 and the jobless rate was unchanged at 5.5%. Analysts polled by the Wall Street journal had forecasted a growth of 248,000 in March while unemployment would remain at 5.5%.
“This is a shocking number and it cast some doubt on the growth momentum,’’ Gary Pollack, who helps oversee $12 billion as head of fixed-income trading in New York at Deutsche Bank AG’s private wealth-management unit, told the Wall Street Journal.
“A rate increase in June is off the table.”
The number of Jobs generated in March was the lowest since 2013. This slowdown in jobs created comes as the clearest indication yet that the US labor market is slowing down.
During the holiday-shortened trading session for futures on Friday, the S&P 5oo Index futures declined 17.5 points or 0.7% to 2,045.
Futures for the Dow Jones Industrial Average slipped 129 points or 0.7% to 17,544. Futures for the Nasdaq Composite fell by 27 points or 0.71% to 4,279. The major index futures were largely unchanged before the jobs data.
The jobs report reflects a general theme that the first quarter did not live up to expectations,” Carl Tannenbaum, chief economist for Northern Trust, told Fox Business.
“The weakness stems from weather-related depression, as seen in soft construction job gains. The drastic correction that the energy industry is experiencing has also affected job gains there, as we saw declines in energy and mining,” Tannenbaum noted.
Despite American markets being closed for the Easter holiday during the report, it s expected to set the tone for Monday’s trading.
While weak economic data has in the recent past help boost market sentiment by making the possibility of a rate hike in the near future less likely, the jobs data only added to the gloomy outlook for corporate incomes in the first quarter this year hurt by a robust dollar.
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