Brian Zwerner of Kensington Blake Capital Commentary on March Jobs Report

April 6, 2015

Kensington Blake Capital’s Managing Principal Brian Zwerner reviewed the March unemployment report

from the Bureau of Labor Statistics and believes this will change the course of the Federal Reserve rate

movement for 2015.

As reported by the BLS, the U.S. economy only added 126,000 jobs in March. This result was significantly

below 189,000 consensus of economists as polled by Bloomberg prior to the report. While there have

been a few articles highlighting that difficult weather was at least partly to blame for the poor result,

there can be no denying that this was a weak number. In addition, prior month’s revisions were also

negative as reported last week.

Another area that optimists have pointed to is that the unemployment rate. The rate stayed unchanged

at a fairly low level of 5.5%. However the participation rate continued to drop, with 96,000 people

dropping out of the workforce to allow the unemployment rate to stay the same.

At Kensington Blake Capital, we believe this is the final decision item for the Federal Reserve to close the

door on a possible June rate hike. The rhetoric coming out of Federal Reserve officials made it sound as

if a June rate hike would only happen if the data forced their hand. This weak March report gives

ammunition to the doves to hold off on any rate increase.

When looking past the June meeting, the meeting in September is still very much in play for the Federal

Reserve. With two further meetings in 2015 following that one, it is possible the Fed Funds rate could

be at 0.75-1.25% at year end. We will continue to monitor the data and update our forecasts going

forward as more information on the U.S. economy is provided.

Commentary by Brian Zwerner, Managing Principal, Kensington Blake Capital, LLC.

www.kensingtonblakecapital.com