The Messenger 04.05.13
By CHRISTOPHER S. RUGABER
and PAUL WISEMAN
AP Economics Writers
WASHINGTON (AP) — U.S. employers added just 88,000 jobs in March, the fewest in nine months and a sharp retreat after a period of strong hiring. The slowdown may signal that the economy is heading into a weak spring.
The Labor Department said today that the unemployment rate dipped to 7.6 percent, the lowest in four years, from 7.7 percent. But the rate fell only because more people stopped looking for work. People who are out of work are no longer counted as unemployed once they stop looking for a job.
The percentage of Americans working or looking for jobs fell to 63.3 percent in March, the lowest such figure in nearly 34 years.
Stocks plummeted after the report. The Dow Jones industrial average dropped 157 points in morning trading. Broader indexes also declined.
March’s job gains were less than half the average of the previous six months, when the economy added an average of 196,000 jobs a month. The government said hiring was even stronger in January and February than previously estimated. January’s job growth was revised up from 119,000 to 148,000. February’s was revised from 236,000 to 268,000.
Several industries cut back sharply on hiring in March. Retailers cut 24,000 jobs after averaging 32,000 in the previous three months. Manufacturers cut 3,000 jobs after adding 19,000 the previous month. Financial services shed 2,000.
The Labor Department uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That’s the survey that produced the gain of 88,000 jobs for March. It uses a separate survey of households to calculate the unemployment rate.
In March, the number of people either working or looking for work fell by nearly 500,000. It was sharpest such drop since December 2010. And the number of Americans who said they were employed dropped nearly 210,000.
Average hourly pay rose a penny, the smallest gain in five months. Average pay is just 1.8 percent higher than a year earlier.
“This is not a good report through and through,” Dan Greenhaus, chief economic strategist at brokerage firm BTIG, said in a note to clients.
Economists had hoped the bigger pay increases in recent months would continue and boost Americans’ ability to spend.
Some economists said they expect a slowdown this spring, though not as bad as in the past three years.
“We don’t anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the U.S. is still unable to sustain what used to be just average rates of growth,” said Paul Ashworth, an economist at Capital Economics.
The decline in the work force reflects several trends, economists say: Many of those out of work become discouraged and give up on their job hunts. And as the population ages, more people are retiring.
Gary Burtless, senior fellow in economic studies at the Brookings Institution, notes many Americans have likely stopped looking for work because their unemployment benefits have run out.
Most analysts think the economy strengthened from January through March, helped by the pickup in hiring, a sustained recovery in housing and steady consumer spending.