Stock futures are off by more than 1% after the jobs report showed a much lower than expected 88,000 jobs were added in March. Economists had expected 200,000 jobs for the month. The unemployment rate fell slightly, from 7.7% to 7.6%, but this is due to the methodology used to calculate that number, so no one is placing much emphasis on this number.
The economy in general bounced back from a slowdown in January, with February’s numbers improving, before dipping again in March. A lot of the March data, including the ISM indexes, housing, and now unemployment have been weak. The sequester spending cuts, which are just now starting to go into effect, haven’t really impacted the economy yet, so we should see a further weakening due to these cuts over the coming several months.
The only bright spot, if you could call it that, is that the Fed will likely delay winding-down its bond buying program (QE3), at least for a short time, although I still expect them to start the exit process before the end of 2013, with an end coming within the first half of 2014. The expectation of the end of the Fed’s stimulus will certainly negatively impact the economy.