Jobs Friday

News release from the Bureau of Labor Statistics showed US payrolls rose by only 88,000 in March and jobless rate declined slightly to 7.6%, compared to economists forecast of 200,000 additional payrolls and 7.7% unemployment rate. The ADP report on Wednesday had already foreshadowed a slowdown in the labor market; however, the magnitude of the this miss is still noteworthy even given the volatility of initial release of nonform payroll figures. Understandably, stock futures are trading off.

One interesting tidbits in the news release has to do with labor force participation.

The civilian labor force declined by 496,000 over the month, and the labor force participation rate decreased by 0.2 percentage point to 63.3 percent. The employment-population ratio, at 58.5 percent, changed little.

Hypothetically speaking, if labor force continues to decline, even with the subdued job creation, we may get to the magical 6.5% unemployment rate that Fed promised that they would cease the quantitative easing program. That may present an interesting dilemma for the Fed.