Basketball fans the world over this weekend will be watching the University of Kentucky Wildcats play the University of Wisconsin Badgers and the Duke Blue Devils take on the Michigan State Spartans in the NCAA basketball “Final Four,” setting up next week’s championship game.  

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BLS Jobs Report: “March Madness”

Sat Apr 4, 2015

Basketball fans the world over this weekend will be watching the University of Kentucky Wildcats play the University of Wisconsin Badgers and the Duke Blue Devils take on the Michigan State Spartans in the NCAA basketball “Final Four,” setting up next week’s championship game.

Meanwhile, the government’s Bureau of Labor Statistics yesterday provided almost as much March Madness in reporting surprisingly weak jobs numbers for last month. The economy created only 126,000 new jobs, way below the revised February gain of 264,000 and the smallest monthly increase since December 2013. Wall Street’s consensus forecast was for almost 250,000 new jobs. The unemployment rate remained at 5.5%.

March’s soft job creation number represents the first in 12 months where the number of new jobs came in below 200,000.

Does this mean the U.S. economy is about to stall out? No. First quarter GDP growth, due to be announced at the end of April, will likely come in sharply below 2014’s growth of 2.2%. It’s possible that the U.S. economy grew 1% or even less in the first quarter of 2015.

But weak economic growth can be attributed to two big, though temporary, phenomena: unusually frigid winter weather and the recent surge in the greenback relative to other currencies. The Euro has slumped 25 percent against the U.S. dollar this year, reaching a 12-year low of $1.05 in March.

The strong dollar negatively affects manufacturing exports, crimps U.S. multinational companies’ profits and without question put the brakes on March job creation. Coupled with one of the most severe winters in memory, new hiring basically paused in March from the breakneck pace of 200,000 jobs per month for 12 consecutive months.

March Madness is a phenomenon unique to NCAA championship college basketball, with surprise upsets winnowing the original 68 contenders down to a Sweet 16, an Elite 8, the Final 4 and then an ultimate NCAA champion. But economy watchers are almost as mad about the March jobs report: everyone was expecting another blowout jobs number. Then came the upset, with only 126,000 new jobs, far below expectations.

But there’s nothing final about last month’s jobs number. Temporary factors clearly buffeted the economy. Like NCAA champions the U.S. can be counted on to prove its resilience and post much better numbers in the months to come.