Job Growth Loses Steam, 80k Lower Than Expected

It's probably a good thing that markets are closed today for the Good Friday holiday or else we would likely see the equity markets in the red.  The jobs report came out this morning and it was a shocker to the downside with US employers only adding 120k jobs vs. the 200k jobs expected.  However the unemployment rate magically dropped from 8.3% to 8.2%.  


Monday will make for a very interesting trading day.  Personally I would not mind seeing a pullback only from the standpoint that the markets can't run straight up forever which is basically what we have down since the October lows expect for a view days here and there.  I am glad that we took profits earlier in the week. as our cash position is now back up to the 60% level.


Here are the report highlights from Barrons

Released On 4/6/2012 8:30:00 AM For Mar, 2012 Prior Prior Revised Consensus Consensus Range Actual Nonfarm Payrolls - M/M change 227,000  240,000  201,000  180,000  to 239,000  120,000  Unemployment Rate - Level 8.3 % 8.3 % 8.1 % to 8.4 % 8.2 % Average Hourly Earnings - M/M change 0.1 % 0.3 % 0.2 % 0.1 % to 0.3 % 0.2 % Av Workweek - All Employees 34.5 hrs 34.6 hrs 34.5 hrs 34.5 hrs to 34.6 hrs 34.5 hrs Private Payrolls - M/M change 233,000  233,000  224,000  205,000  to 246,000  121,000

Highlights Today's jobs report was clearly disappointing though the unemployment rate dipped to 8.2 percent. Payroll jobs in March advanced a modest 120,000, following increases of 240,000 in February (originally 227,000) and 275,000 in January (prior estimate up 284,000). The net revisions for January and February were up 4,000. Analysts expected a 201,000 increase for March. Private payrolls were barely stronger than overall, rising 121,000 in March after a 233,000 increase the prior month. The median market forecast was for a 224,000 advance. Goods-producing was moderately strong while service-providing was very sluggish. Retail trade employment actually declined. Goods-producing industry employment rose 31,000 after a 29,000 gain in February. For the latest month, manufacturing increased 37,000; construction dipped 7,000; and mining nudged up 1,000. Private service-providing industry employment rose only 90,000, following a 204,000 boost in February. The big negative was a 34,000 decline in retail trade, somewhat conflicting with recently moderately favorable data on retail sales. The public sector continued to shrink but just barely, slipping 1,000 in March after a 7,000 increase in February. Average hourly earnings rose 0.2 percent, following a 0.3 percent gain in February. Expectations were for a 0.2 percent gain. The average workweek for all workers in March slipped to 34.5 hours from 34.6 in February. Analysts projected 34.5 hours for March. From the household survey the dip in the unemployment rate to 8.2 percent from 8.3 percent reflected a 164,000 decline in the labor force. Household employment slipped 31,000. The median market forecast for the unemployment rate was for 8.3 percent in March. The March employment report is disappointing. However, there are still plenty of questions. How did warm weather affect the data? Did earlier months in the year take away from spring? Monthly surveys are showing stronger numbers, showing increased hiring. Which should be believed? The logical conclusion is that more data are needed though the weight of the evidence currently is not good.