The latest labor report indicates the economy added just 126,000 jobs in March, the lowest figure in a very long time.
The latest labor figures are in, and they’re not good news for the U.S. economy: only 126,000 jobs were added in March, a huge reduction in the growth of the economy that suggests things aren’t as rosy as they seemed.
Despite the fact that steady hiring typically boosts economic growth, as well as cheap gasoline and unemployment that is headed south, it’s not translating into economic growth in the first quarter of 2015, which has been significantly slower than the breakneck pace of 2014, according to an Associated Press report.
Restaurants were one of the industries to cut back, as despite the low gasoline prices, families weren’t dining out more with the money they saved. Builders and manufacturers, meanwhile, slashed about 1,000 workers from their payrolls as construction slowed down and factory orders were underwhelming.
The unfortunate results indicate the economy is slowing down after many months of strong growth. The first three months appear to have stopped the growth altogether.
There are other factors at play: a harsh winter has an effect on investment, and March may simply be a hiccup on the way to the next phase of economic growth, similar to what happened in 2014 when there was slump in the first quarter of the year, followed by massive growth throughout the year.
Then there is the strong dollar, which has put a damper on exports. Because the dollar is strengthening versus the euro and other currencies, goods that are built in U.S. factories are now 20 percent more expensive than they were a year ago.
Meanwhile, oil prices have continued to plummet. That may be good for consumers, but it’s not good for the oil industry and manufacturers who support them. The number of active rigs has dipped 50 percent since October, according to the report.
In addition, despite strong growth in total employment figures, wage growth has consistently lagged behind, improving at a rate of just 2.1 percent. Also, average hours worked dropped in the last months, which resulted in a further decrease in wages.
Then there is technology. Employers are starting to rely more and more on automation instead of on hiring people, according to the report.
