The US unemployment rate fell to its lowest in almost a decade in March, despite the economy adding a smaller than expected number of jobs.
Employers added 98,000 jobs last month – far fewer than the 180,000 expected by economists and less than half the figure for January and February.
However, the unemployment rate fell from 4.7% in February to just 4.5% – the lowest since May 2007.
Anything under 5% is considered to indicate “full employment”.
The economy needs to create 75,000 to 100,000 jobs a month to keep pace with growth in the working-age population.
The US had added more than 200,000 jobs in both January and February, but March brought lower temperatures and a major storm to the North East, which was likely to have hit hiring.
“There probably was a large weather-related factor in there during the measurement week. The underlying data still suggests that job growth is pretty good,” said Russell Price, Senior Economist at Ameriprise Financial Services.
Aberdeen Asset Management investment strategist Luke Bartholomew said the decline in job creation was another sign of a “pretty tight” labour market.
“The slowdown in payroll growth is exactly what you would expect when the economy closes in on full employment,” he said.
Neil Wilson at ETX Capital described March’s job creation figure as a “massive miss”, but doubted it would stop the US Federal Reserve raising interest rates twice more this year, with the next move expected in June.
“The overall trend remains one of very strong job creation – and it’s still a decent number that is way above the paltry 38,000 registered in June 2016,” he said.
The dollar rose against the euro and sterling, while the Dow Jones and S&P 500 were flat in morning trading in New York.
The US Labor Department also revised the number of jobs created in February down from 235,000 to 219,000, while the figure for January was lowered from 238,000 to 216,000.
The percentage of people in work or looking for a job held steady at 63%.