MercoPress. South Atlantic News Agency

US economy gains confidence: 215.000 more jobs in March and 1.4% growth in fourth quarter

The US economy added 215,000 jobs in March, a little less than it did in February when 242,000 jobs were created. The unemployment rate has risen to 5% from 4.9%, which was an eight-year low, but the Labor Department said more Americans were finding jobs, which suggested a sign of confidence in the US economy. In effect this follows the report on the US economy which grew at an annualized rate of 1.4% in the fourth quarter of 2015s.

 The increase could allow a cautious Federal Reserve to raise interest rates gradually this year. The US is continuing to create jobs, despite a global economic slowdown and cheap oil prices which have hit the energy sector.

The gains were in the service sectors, especially retail, health and education and leisure and hospitality. There were also new jobs in government and construction.

The unemployment figures for January and February have been revised slightly down to show 1,000 fewer jobs created than previously reported.

Chris Williamson, chief economist at Markit, said that while the numbers for jobs created last month looked good, a rate rise from the Federal Reserve would not be the right move.

“Another good month of hiring in the US will encourage further chatter in some corners of the Fed moving closer to hiking interest rates again, but signs of weakening economic growth mean policymakers are likely to be cautious and hold off until the global economy is showing greater vigor and the US economy more sparkle,” he said.

“However, while the labor market data shout 'rate hike', signs of a worrying weakness in the pace of economic growth at home and abroad caution against the Fed rushing into any further tightening of policy.”

Curtis Long, chief economist at the National Association of Federal Credit Unions in Washington, said that while the employment numbers were “solid”, not all areas of the economy were performing well.

“We are seeing some weakness in some industries like the oil sector. Manufacturing is having another bad month,” he said.

“Everything is not clicking on all cylinders. Growth is strong enough to support the labor market. We are drawing nearer to full employment. We could see some slowing in the second half”.

Meanwhile the US Commerce Department said the US economy grew at an annualized rate of 1.4% in the fourth quarter of 2015, after it revised its fourth quarter GDP to upward from an initial estimate of 0.7%. Overall, the US economy is estimated to have grown at a rate of 2.4% for all of 2015.

One reason for the revised figure was greater consumer spending than officials initially thought, boosted by an improving labor market. Analysts had expected the fourth quarter growth rate to remain unchanged from the last estimate of 1%.

“It's especially good that we saw a boost in consumption, however we are only talking about 1.4% growth, which is still anemic compared to the 3.5% we would like to see,” said Dan North, chief economist at Euler Hermes North America.

US corporate profits dipped 11.5% for the fourth quarter compared to the same October through December period in the previous year. Companies were hurt by low oil prices, with some industrial and petroleum linked companies forced to cut their workforces or file for bankruptcy