The US labor market took a hit on 3 April when the Department of Labor's monthly report stated only 126,000 jobs were created in March. According to the report, employment was up in the professional and business services, healthcare and retail trade sectors. However, the mining sector lost jobs.
The unemployment rate and number of unemployed were down by 1.1% and 1.8m over the last year, the report revealed. The report added that unemployment rates for the major worker groups "showed little or no change in March" and that overall unemployment held at 5.5%.
According to the New York Times, analyst have placed the blame for the hiring slowdown on the north-east's terrible winter weather and a drop in oil prices.
Northern Trust's chief economist Carl Tannenbaum told the Times, "The American energy industry is adjusting very quickly to low oil prices, and so we've seen this in the counts of the number of rigs that are active and are seeing in mining and energy-related industries. The bad news is we're losing some jobs. The good
"The bad news is we're losing some jobs. The good news is, we hope, that the average consumer is saving a tremendous amount of money in lower gasoline prices."
Tannenbaum added to MarketWatch, "The jobs report reflects a general theme that the first quarter did not live up to expectations."
The weaker jobs report caused US stock-index to decline severely on 3 April, MarketWatch reported. Futures for the S&P 500 dropped 19.75 points, for the Dow Jones Industrial Average by 165 points and for the Nasdaq-100 by 43.75 points.
According to MarketWatch, all major US stock exchanges were closed on Good Friday but will reopen on 6 April. Meanwhile, London markets and all major exchanges in Europe will be closed 3 April and 6 April.
However, investors should not be too worried about the market's reaction to the jobs report, said JJ Kinahan to MarketWatch.
"The move in futures markets… is likely very exaggerated, as there is nothing on the other side of the trade," the chief derivatives strategist at TD Ameritrade said. "The bond market reaction indicates that traders really wanted safety going into the weekend in light of very disappointing jobs report."
The Times added that the slowdown revealed by the report will likely reinforce the Federal Reserve's view that interest rates should remain near zero for a longer time.