Things aren't looking so hot for the economy.

The Atlanta Federal Reserve's GDPNow model forecasts economic growth of only 0.1 percent, as of Thursday. And that's an improvement from Wednesday when the projection was zero growth.

Thursday's news of the lowest U.S. trade gap in five years for February gave the GDP projection a boost. But the trade improvement largely reflected the shutdown of West Coast ports that curbed imports.

The 0.1 percent estimate represents a sharp reduction from 1.9 percent in early February. The economy grew 2.2 percent in the fourth quarter.

The indicator might fall further Friday, given the weak March jobs report. Non-farm payrolls rose only 126,000 last month, the smallest increase since December 2013. And the labor participation rate tied a 37-year low at 62.7 percent.

"There's really no way to sugar coat this. This is a soft print all the way around, no matter how you slice it," Omair Sharif, rates sales strategist at Newedge USA, told Bloomberg. "It seems that it's corroborating that the U.S. definitely hit a soft patch in the first quarter."

To be sure, he thinks hiring will rebound next quarter.

Investors' concern about the economy was reflected in the 10-year Treasury yield's drop to a two-month low of 1.80 percent Friday. The yield has slid from 2.17 percent Dec. 31.

As for the economy, in addition to weak job growth, retail sales slid 0.6 percent in February, the third straight monthly decline.

"It is like every time when the Fed tries to raise interest rates, there is a disappointing release that tells them to be patient," Mark MacQueen, a portfolio manager at Sage Advisory Services, told The Wall Street Journal.

The Federal Reserve has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008. Many economists expect the Fed to begin raising rates in September.
 

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