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Portugal will carry out new spending cuts this year after the Constitutional Court blocked a plan to suspend the monthly payments of salaries of public servants and pensioners.
There was a shock in the labor market in March with a noticeable slowdown in jobs, slowing wage growth, falling labor participation rates and lengthening the duration of unemployment. The only bright spot is a steady business growth in the total working hours.
Economists are very surprised and worried. An employment growth was limited 88k in the labor market in March, while the economy has added 212k new positions per month the previous three months.
Weakness is everywhere. The manufacturing sector has reduced 3k jobs, it is the first decline since September 2012.
The construction sector has slowed down its growth in the labor force (up to 18k, on average - 37k per month from December to February). The services sector has created 181K new working places in February (and an average of 167k per month from November to January), only added 79k jobs in March.
In addition, the rate of growth in average hourly wages slowed to 1.8% y/y vs. +2.1% in the previous three months.