The U.S. economy added 120,000 jobs in March, the smallest addition since Oct. 2011.
Despite the paltry job gains, the unemployment rate dropped slightly from 8.3 percent to 8.2 percent.
March’s job numbers landed much lower 203,000 jobs economists predicted. For the past 3 months, the economy added an average of 246,000 jobs.
Economists did correctly predict little change in the unemployment rate but believed the reason would be because more workers are re-entering the workforce due to optimism about job possibilities.
Much of the low March job growth is attributed to the unseasonably warm weather in January and February. Essentially, workers normally hired in the spring season were just hired earlier than usual.
Low job growth and a drop in the unemployment rate also signal that more Americans are dropping out of the labor force altogether.
“It is unlikely that these missing workers are going to be drawn back into the labor force in large numbers until job prospects are strong enough that they won’t face months of fruitless job search,” Heidi Shierholtz, economist at the Economic Policy Institute said.
Goods-producing industries stayed on pace with prior months’ numbers, netting 31,000 jobs in March compared to 29,000 in February.
Private service-providing industries experienced much slower job growth needed to sustain the trend of over 200,000 jobs. These industries added 90,000 compared to 204,000 jobs in February 2012.
Retail services lost 33,800 jobs in March. Temporary help services lost 7,500 jobs in March after gaining 54,900 jobs in February 2012.
The lower job numbers put a dark cloud over promising economic news released this week. The number of Americans filing for jobless benefits the week ending Mar. 31 dropped to its lowest level in 4 years. Job numbers from January and February were also revised upward, indicating more jobs were added during those two months than previously calculated.
Pres. Obama now can tout 25 months of consecutive job growth. Republicans responded to today’s jobs news as a sign that the economy under Pres. Obama is still on shaky ground.
Earlier this week, Federal Reserve chairman Ben Bernanke signaled to a crowd at the National Association for Business Economics that more consumer demand is needed before unemployment will see significant changes. Bernanke also indicated that interest rates will remain at their current levels for the foreseeable future.
“Despite the fact that the labor market is slowly getting stronger, it remains a very difficult environment for job seekers,” Shierholtz said.
