Gartman: 'Obamacare' Stunting Job Growth
With a fresh batch of U.S. non-farm payroll data set to be released on Friday, expectations remain low for any improvement on March's surprisingly dismal figure. Dennis Gartman, founder and editor of the Gartman Letter, believes the new Affordable Care Act (ACA) could be a key reason why businesses are reluctant to hire new workers, explaining the surprising dip in hiring.
"Because of 'Obamacare' going into effect in the not too distant future you can rest assured of one thing: anybody who has a small business with, let's say 47, 48, 49 workers, is not going to add the 51st," Dennis Gartman told CNBC Friday.
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"The average workweek has been rising and it has been rising rather steeply lately which tells you that businesses are holding on to their old employees, they would love to be able to add new employees."
The average workweek inched up to 34.6 hours last month, according to the Bureau of Labor Statistics, up from 34.5 in February and 33.8 in 2009. It's also within sight of the 34.7 hours per worker per week when the economy peaked in 2006.
Under ACA, also known as "Obamacare", employers with 50 or more full-time workers face a mandate to provide insurance. It's known formally as shared responsibility. The tax implications of the act are set to begin in 2014.
"We're working workers more aggressively than we have for longer periods of time, you're keeping your best workers so the productivity numbers are getting better but it doesn't give you a decline in the jobless rate." Gartman said.
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The monthly employment report due on Friday is expected to show improvement over March but still deliver a fairly weak picture of job growth. Economists expect to see 145,000 nonfarm payrolls added in April, and the unemployment rate steady at 7.6 percent, after March's disappointing 88,000 payrolls, according to Reuters.
The gloomy news continued for jobs this week as ADP reported Wednesday that private companies created just 119,000 new positions in April.
Whether Friday's figure is below 100,00 or above 200,000, it will not matter to stock markets, Gartman said, as the Federal Reserve will continue its quantitative easing program for the foreseeable future.
"Clearly we'd like to see better numbers. The ADP was very disappointing , you have to remember that the ADP numbers are private jobs and we have been destroying government jobs for months and months and months and months," he said.
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"The Fed has made it clear that they are going to hold that policy for a long period of time into the future. They are concerned about the unemployment numbers, they want to see unemployment get to 6.5 percent or better, that's a long time in the future."
—By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81