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Can March’s Non-Farm Payroll Lead to a Further Sell-Off?

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Apr. 10 2018, Updated 11:35 a.m. ET

US non-farm payroll in March 2018

According to a report by the U.S. Bureau of Labor Statistics, March’s non-farm payroll report indicated a softer rise in the US labor market. Non-farm payrolls stood at 103,000 in March 2018 compared to 313,000 in February 2018. March’s figure didn’t meet the market expectation of 193,000. It was the lowest rise in employment since September 2017.

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March highlights of the jobs report

  • The healthcare (XLV) sector added 22,000 jobs.
  • The mining sector added 9,000 jobs.
  • The professional and business service sector added 33,000 jobs.
  • The manufacturing sector added 22,000 jobs.

Impact on the economy and the market

After showing a strong improvement in February 2018, the non-farm payroll figure witnessed a weaker rise in March 2018. The unemployment rate stood at 4.1% in March, which was unchanged from February. The weaker rise in non-farm payroll is increasing concerns about the US labor market.

After the announcement of March’s non-farm payroll report on Friday, April 6, 2018, the major US indexes fell. The NASDAQ Composite index (QQQ), the S&P 500 index (SPY), and the Dow Jones Industrial Average index (DIA) fell 2.3%, 2.2%, and 2.3%, respectively, that day. In March 2018, these indexes fell 2.9%, 2.7%, and 3.7%, respectively, as possible trade war worries affected investor sentiment.

After President Donald Trump announced the imposition of an import tariff on steel, aluminum, and Chinese goods in March 2018, the equity market became nervous. In this kind of scenario, if any macroeconomic data such as payroll, economic growth, or consumer spending have weaker figures, it could further affect investor sentiment.

You may be interested in reading Jamie Dimon: Market Is Miscalculating the Fed’s Future Moves.

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