Story image

While you were sleeping: US jobs disappoint

02 Apr 2015

US equities slid after a private jobs report showed slower-than-expected growth, prompting concern that the economy might not be a strong as previously thought.

An ADP Research Institute report showed US employers added 189,000 workers to payrolls in March, well short of expectations for 225,000.

"Job growth took a step back in March," Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania, said in a statement. "The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market. Despite the slowdown, underlying job growth remains strong enough to reduce labour market slack."

On Friday, a Labor Department's report is expected to show nonfarm payrolls rose 245,000 in March, with a 5.5 percent unemployment rate.

"The economy hit yet another rough spot in the first quarter ... which is one of many factors that will make it difficult for the Fed to achieve 'lift-off' by mid-year," Diane Swonk, chief economist at Mesirow Financial in Chicago, told Reuters.

Separately, the Institute for Supply Management's index fell to 51.5 in March, from 52.9 in February.

In afternoon trading on Wall Street, the Dow Jones Industrial Average fell 0.61 percent, the Standard & Poor's 500 Index declined 0.56 percent, while the Nasdaq Composite Index dropped 0.73 percent.

Declines in shares of Wal-Mart and those of Johnson & Johnson, down 2.1 percent and 1.8 percent respectively, led the Dow lower.

Shares of American Airlines Group sank 4.2 percent while those of Delta Air Lines dropped 3.8 percent after Deutsche Bank downgraded its ratings on the shares amid concern about the strong US dollar and increased capacity overseas.

Oil climbed after a government report showed US crude output fell 36,000 barrels a day to 9.39 million last week, the first decline since January. West Texas Intermediate for May delivery rose 5.6 percent in New York, while Brent for May settlement added 4.3 percent in London.

In Europe, the Stoxx 600 Index ended the session with a 0.3 percent gain from the previous close, amid better-than-expected euro-zone manufacturing data.

Germany's DAX gained 0.3 percent, while the UK's FTSE 100 Index rose 0.5 percent, and France's CAC 40 Index added 0.6 percent.

Here, a Markit Economics report showed euro-zone manufacturing expected more than initially estimated in March, with a final reading at 52.2, up from a preliminary reading of 51.9, and up from February's 51.0. It was also the strongest reading in 10 months.

"The final PMI reading signalled slightly stronger growth of the manufacturing economy than the preliminary reading, adding further to signs that the eurozone economy is reviving after last year's slowdown," Chris Williamson, chief economist at Markit, said in a statement.

"Producers are benefitting from the weaker euro, which has had the dual effect of boosting competitiveness in export markets as well as making competing imports more expensive in the home markets," he said.

Security flaw in Xiaomi electric scooters could have deadly consequences
An attacker could target a rider, and then cause the scooter to suddenly brake or accelerate.
Four ways the technology landscape will change in 2019
Until now, organisations have only spoken about innovative technologies somewhat theoretically. This has left people without a solid understanding of how they will ultimately manifest in our work and personal lives.
IDC: Top 10 trends for NZ’s digital transformation
The CDO title is declining, 40% of us will be working with bots, the Net Promoter Score will be key to success, and more.
Kiwi partner named in HubSpot’s global top five
Hype & Dexter is an Auckland-based agency that specialises in providing organisations with marketing automation solutions.
Moustache Republic expands Aussie presence with new exec
The Kiwi digital commerce partner has appointed a Sydney-based director to oversee the expansion of the company’s Australian footprint.
Epson’s new EcoTank range with two years printing per tank
With 11 new EcoTank printers that give an average user two years of printing and cost just $17.99/colour to refill, Epson is ready to change the game.
Te reo Māori goes global via language app called Drops
If you’re keen to learn a few words of Māori – or as much as 90% of the language, you may want to check out an Android and iOS app called Drops.
Reckon Group announces a steady profit in 2018
Reckon continued its investment in growth throughout the year with a development spend of $14.3 million.