Daily commentary: As predicted, the US jobs report was weak

I wrote you last week after the third consecutive elevated jobless claims report, saying this was a definite harbinger of a weak jobs report. This has proved true. While March's gain of 120,000 jobs was revised up to 154,000 and unemployment declined from 8.2% to 8.1%, payrolls rose by only 115,00.

The US economy needs to increase jobs by 100,000 per month just to deal with population growth. At this point in an economic cycle, we should expect 300,000 or 400,000 new jobs if things were doing well. But they are not. Unemployment declined because the labor force participation rate fell to 63.6 percent, the lowest level since 1981. The total number of unemployed persons in the US is 12.5 million.

I see GDP growth coming in slightly below 3% - probably around 2.5%, with downside risk -...

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