Boost to US employment figures signals labour market recovery
The US economy added more jobs than forecast in March and the unemployment rate unexpectedly declined to a two-year low of 8.8pc,a sign the labour- market recovery is gathering speed.
Payrolls increased by 216,000 workers last month after a revised 194,000 gain the prior month, the labour department said yesterday in Washington.
Economists projected a March gain of 190,000, according to a Bloomberg News survey. The jobless rate dropped from 8.9pc in February, the fourth straight decrease.
Record exports and gains in business and consumer spending are prompting companies like Chrysler and Kohl's Corp to boost staff, helping the US weather the highest energy prices in more than two years.
The improving economy encouraged Federal Reserve policymakers last month to signal they were unlikely to extend bond purchases beyond June.
"This is consistent with a labour market recovery that is broadening," Robert Dye, a senior economist at PNC Financial Services in Pittsburgh, said.
"We're starting to see more and more small businesses participating in hiring. That's providing the foundation of a self-sustaining recovery."
A separate survey of households showed the size of the labour force increased by 160,000 in March and employment grew by 291,000.
The manufacturing industries that account for 11pc of the economy are likely to remain at the forefront of the recovery as businesses replenish inventories, the auto industry rebounds and China and other emerging markets boost imports of US-made goods.
Economic growth accelerated to a 3.1pc annual rate in the fourth quarter of 2010 as consumer spending climbed by the most in four years.
The dollar extended its biggest weekly gain versus the yen in more than a year on the back of the job figures.
Japan's currency headed for its biggest weekly drop since December 2009 against the dollar amid concern the nation's economy will be hampered by the aftermath of the March 11 earthquake and tsunami.
The dollar weakened against the euro after New York Federal Reserve president William Dudley said not to be "overly optimistic about the growth outlook".
"Yen weakness is still the biggest story of the week," said Greg Anderson at Citigroup. "We kind of turned around on euro when Dudley spoke and I attribute the bounce-back 100pc to that." (Bloomberg)