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TheStreet Open House

Wall Street Firms Shrug Over Jobs Pullback

NEW YORK (TheStreet) -- Despite a hiccup during March in nonfarm payrolls, Wall Street firms remain optimistic about employment growth and that's good news for the incumbent president whose political life likely depends on it.

Unemployment dropped in March to 8.2%, down from a previous 8.3%, but nonfarm payrolls added a modest 120,000 jobs, less than the expected increase of 200,000.

Presumed Republican nominee Mitt Romney blasted the president Friday in a statement after the worse-than-expected jobs number emerged. He called the report troubling and weak: "It is increasingly clear the Obama economy is not working and that after three years in office the President's excuses have run out."

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The president would probably be delighted to hear that more than a few Wall Street firms saw Friday's jobs report as a blip that was unlikely to signify a trend for the rest of 2012.

"Provided that claims continue to remain near their recent readings, if not decline further, we expect underlying payroll gains on average to come in well above 200k per month," Deutsche Bank wrote in a research note.

Credit Suisse economists said in a note that they saw Friday's data as a hiccup, and believed the labor market would continue to recover moderately.

Political opponents who have slammed the president throughout his term about high unemployment used the jobs number miss as a strategic opportunity to reiterate to Americans their discontent.

"Today's report shows that families and small businesses are still struggling to get by because of President Obama's failed economic policies," House Speaker John Boehner (R., Ohio) said in a statement.

"The level of growth we are seeing isn't enough to make a difference for the millions of Americans still out of work or families facing high gas prices and the uncertainty of a lagging economy," House Majority Leader Eric Cantor (R., Va.) said in a statement.

Even Democratic leadership acknowledged Congress's responsibility to boost national employment.

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"Too many Americans in Nevada and throughout our nation are still out of work, and that is why Congress needs to remain focused on creating jobs," Senate Majority Leader Harry Reid (D., Nev.) said on his Web site.

One explanation for March's drop and February's upside surprise was the weather.

An unseasonably warm winter, economists have said, led to a boost to payrolls in February, but ultimately leveled out last month to return to the expected 2012 monthly average.

" T he softer reading in March appears to reflect "payback" due to weather effects rather than fundamental weakening," UBS wrote in a research note. "Furthermore, we estimate that the earlier weather-related boost to payrolls was more-or-less fully reversed in March.

Economists at Citibank said the low March payrolls number did not compel the firm to adjust its 2012 full-year estimates for average gains near 175,000, and added that February's stronger-than-expected readings resulted from unusual weather patterns.

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