Whoa: Growth in jobs falls off, U.S. unemployment rate dips
Employers added 120,000 jobs in March, less than half the average of the previous three months, the government reported Friday.
The Washington Post
Job gains in 2012Hiring fell off sharply last month:
Months of surprisingly robust job creation have suddenly lost steam, raising new questions about an economic recovery that had seemed to be building momentum.
Employers added 120,000 jobs in March, less than half the average of the previous three months of 245,000, the government reported Friday.
The sudden slowdown in hiring cast a shadow on an economic picture that had been brightening in recent months with a surging stock market, increasing auto and retail sales, and rising consumer confidence.
It also lent urgency to concerns about whether the strong job gains seen in recent months were partly a statistical fluke, or even a result of unseasonably warm winter weather, which led employers to hire earlier than usual.
Most investors didn't have the chance to deliver a verdict on the report. The stock market was closed for Good Friday.
The question is whether the March jobs report represents a momentary stumble or another bad turn for the economy.
"We're thinking that the economic data is going to lose some momentum from here going forward," said Bob Baur, chief global economist for Principal Global Investors.
Even as some economists were cheering the robust job creation through the winter as evidence the economy was hitting its stride, others worried that hiring was outpacing the country's mediocre economic growth.
Federal Reserve Chairman Ben Bernanke is among those who have been puzzled by the rapid decline in the unemployment rate, which has fallen sharply from its recent high of 9.1 percent in August.
The decline has been "somewhat out of sync" with the modest pace of economic growth, Bernanke said last month.
Although the unemployment rate dipped slightly from 8.3 to 8.2 percent in March, the decline was due mostly to people leaving the job market (or the "labor participation rate"), which means they are not included in the government's unemployment calculations.
Meanwhile, March's rate of job creation was just sufficient to keep pace with the normal expansion of the labor force, but not enough to make a significant dent in overall unemployment.
The nation needs robust job growth to escape the clutches of an enormous jobs deficit. There are 5.1 million fewer jobs now than there were when the last recession began in December 2007.
In addition, economists estimate that the economy should have added an additional 4.7 million jobs since then to keep pace with the increase in the number of people who have reached working age.
Even at the recent pace of creating more than 200,000 jobs a month, the nation was not expected to return to full employment for seven years, economists have said.
"After six months of robust job gains, a mediocre report in March may signal the start of slower improvements in the next six months," said Gary Burtless, a senior fellow at the Brookings Institution.
That would be bad news for President Obama, who has seen his approval ratings buoyed in recent months as the unemployment rate has declined.
Speaking at a women's economic conference at the White House on Friday, Obama acknowledged the economy is struggling. "It's clear to every American that there will still be ups and downs along the way, and that we've got a lot more work to do," he said.
Republican front-runner Mitt Romney used news of the weak employment report to criticize Obama's handling of the economy.
"This is a weak and very troubling jobs report that shows the employment market remains stagnant," Romney said. "Millions of Americans are paying a high price for President Obama's economic policies, and more and more people are growing so discouraged that they are dropping out of the labor force altogether."
Many economists, pointing to a decline in jobless claims and other upbeat economic indicators, had expected March job creation to top 200,000 for the fourth consecutive month.
"The low job growth in March was an unpleasant surprise and underscores the fact that a robust jobs recovery has not yet solidified," said Heidi Shierholz, of the Economic Policy Institute.
The jobs report showed that retail employment declined by 34,000 in March, while the hard-hit construction industry lost 7,000 jobs.
The jobs report also showed little change in the plight of workers who have been out of work for six months or more. The number of long-term unemployed was essentially unchanged at 5.3 million, and they account for 42.5 percent of 12.7 million people who are unemployed, the report said.
Other analysts said that although the March report was a disappointment, it did not signal that the recovery was off to yet another false start. Instead, they said, it should serve as a reality check.
"We don't think this is the start of another spring dip in labor market conditions as we saw in 2010 and 2011," said Paul Ashworth, chief U.S. economist for Capital Economics. But, he added, the report is a reminder that the "recovery is not suddenly going to transform into a spectacular success."
Washington Post staff writer Ylan Q. Mui contributed to this report. Material from The Associated Press is included in this report.