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Job Machine Slows - Blame El Nino, but Watch Asia

Stock market flirts with Dow 9000. But Japanese economy looks shaky.

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The American job machine is slowing and that could be a sign that the galloping economy as a whole is moderating its pace.

If the economy continues to catch its breath, say economists, that should help keep interest rates on home mortgage and car loans low. And given growing concerns about Japan's economy, it's less likely now that the Federal Reserve Board would be tempted to raise interest rates.

This prospect propelled the Dow Jones Industrial Average up 2.1 percent for the week to close Friday within a whisper of 9,000.

On Friday, the market briefly went over the benchmark after the government reported that the March unemployment rate rose 0.1 percent to 4.7 percent. More importantly, the nation's payroll shrunk by 36,000 workers and the growth of average hourly wages - a clue of future inflation - dropped by 50 percent.

The latest numbers, economists say, illustrate that the economy may have been overperforming because of the El Nio-induced warm weather in January and February.

"Because of the warm weather a lot of people who otherwise would have been hired in March were hired in January and February," says Lyle Gramley, a consulting economist at the Mortgage Bankers Association and a former governor of the Federal Reserve Board.

Keeping an eye on Asia

The numbers, however, will also give the Fed some more time to assess the US economy, especially with some renewed concern over turmoil in Asia. "The headlines suggest the Fed has time to wait to see what Asia does before moving," says David Wyss, an economist at DRI/McGraw-Hill in Lexington, Mass.

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