Job creation continued its upswing this March, though at a slightly slower clip than was expected. The unemployment rate remains unchanged at 6.7% based on The Bureau of Labor Statistics release of the March jobs report last week.
192,000 new jobs were added to the work force in March. That was an improvement from January, when 144,000 jobs were added. But it’s down slightly from February. Winter weather may have contributed to slower than expected job growth.
There are rumors of 220,000 to 240,000 new jobs created in upcoming months, and some economists believe it could be even higher.
This improvement bolsters the case for the Federal Reserve to continue to trim its monthly asset purchase program. The U.S. central bank has already reduced its quantitative easing program to $55 billion a month, from $85 billion.
Fed Chair Janet Yellen suggested that interest rates could start moving higher once the unemployment rate falls to a range of 5.2% to 5.6%, which could happen as early as this summer. This could have the unintended consequence of pushing consumer prices higher due to inflation from rising wages.
One mitigating factor that could muddy the unemployment numbers was Congress’ recent decision not to extend jobless benefits to 1.3 million people. Actively seeking employment is a requirement of receiving unemployment insurance. However, if those affected stop looking for work because they are no longer required to, they could artificially bring down the unemployment rate with it.
Regardless, these new unemployment numbers are encouraging. Simply put, more jobs will spur on a stronger overall economy in 2014.
On the heels of the news the S&P 500 and The Dow Jones Industrial Average enjoyed a slight uptick in pre-market trading Friday, gaining about .4% a piece.
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