Did you know that number of new jobs created in March of 2013 dropped by nearly 180,000 in the US versus February 2013? In February there were almost 268,000 new jobs created in the US and in March a bit under 88,000 were created.
Companies seem to have shifted their interests from external hires to internal hires to cut costs and promote employee retention. Because of the dramatic swing in new jobs created, many companies are putting certain projects or key hires on hold until they see what the long term affects on the market are. Although the unemployment rate fell to 7.6% from 7.7% (the lowest level since December 2007) the decline realistically stemmed from more Americans dropping out of the labor force and not necessarily from finding jobs. Until the March employment report, the U.S. labor market appeared to be gaining momentum. The economy had added an average of 220,000 jobs a month from November to February in a sharp pickup since last fall.
Here at Smith Hanley Associates we don’t believe this “dry” period will last. The market has been showing signs of improvement, and this is only a cautionary stall in the slow but steady rise of the market. Things may continue to be sluggish for the next few months, but it will likely pass by the months of July/August. Only time will tell.