Payrolls, excluding those at government agencies, rose by 192,000 workers in March after a 188,000 gain the previous month that was larger than first estimated, the Labor Department said last week. Private employment exceeded the pre-recession peak for the first time.
The jobless rate held at 6.7 percent last month as an increase of about 500,000 people into the workforce was matched by a similar rise those finding employment, last week’s report also showed.
Figures last week showed consumer spending is on the mend after demand was restrained earlier in the year by bad winter weather. Cars and light trucks sold in March at a 16.3 million annualized rate, the fastest since May 2007, following a 15.3 million pace the prior month. Purchases at General Motors Co., Ford Motor Co., Toyota Motor Corp., Nissan Motor Co. and Chrysler Group LLC all topped analysts’ estimates.
“The incoming indicators are now pointing to some better economic momentum following a weak patch during the first two months of the year, coupled with some supportive policy backdrop, the economy is entering the second quarter on an improved trend,” Ellen Hughes-Cromwick, chief economist at Ford, said on an April 1 conference call. There are “some signs of improving wage and income gains. Very steady consumer confidence is also helping to be a support as we enter the second quarter of economic activity.”
At the same time, lower-income Americans more susceptible to rising food and fuel costs may be pulling back. Family Dollar Stores Inc., the discount chain based in Matthews, North Carolina, announced yesterday plans to close 370 stores as aggressive price-reductions, unusually harsh winter weather and cash-strapped consumers weighed on second-quarter performance.
“Notwithstanding the macro-economic pressure, competitive environment and severe weather, we are not satisfied with our results,” Chief Executive Officer Howard Levine said in a statement. Aside from the immediate closures, the company plans to “slow new store growth beginning in fiscal 2015 to improve our return on investment,” he said.
Modest job gains have allowed the Federal Reserve to proceed with reductions in monthly asset purchases while pledging to keep interest rates low.
The policy makers announced another $10 billion trimming of purchases to $55 billion at their March gathering as they unwind a balance sheet that has ballooned to a record $4.24 trillion.
At the same time, the Fed’s target for the federal funds rate has been at zero to 0.25 percent since December 2008. The first rise in that rate won’t occur until the third quarter of 2015, according to the median of 63 economists in a Bloomberg survey conducted April 4-9.