Employers pulled back sharply on hiring last month, a reminder that the US economy may not be growing fast enough to sustain robust job growth. The unemployment rate dipped, but mostly because more Americans stopped looking for work.
The Labour Department says the economy added 120,000 jobs in March, down from more than 200,000 in each of the previous three months.
The unemployment rate fell to 8.2 per cent, the lowest since January 2009. The rate dropped because fewer people searched for jobs. The official unemployment count only includes those seeking work. The economy has added 858,000 jobs since December — the best four months of hiring in two years.
The mixed report was a disappointment after three months of solid job growth. The slowdown in job creation could threaten a recent rise in consumer confidence and dent investors’ enthusiasm for stocks. It also could prove a setback for President Barack Obama’s re-election hopes.
Stock markets are closed and bond markets will close early for Good Friday, so most investors won’t get to render a verdict on the report until Monday. Federal Reserve Chairman Ben Bernanke has cautioned that the current hiring pace is unlikely to continue without more consumer spending.
Retailers shed nearly 34,000 jobs in March, and temporary help firms dropped almost 8,000 — a potentially bad sign for the job market because companies often hire temp workers before adding full timers. Manufacturers continued to add jobs, hiring 37,000 workers in March.
A broader measure of weakness in the labor market — which adds to the officially unemployed those who have given up looking for work and those forced to settle for part-time jobs — improved last month to 14.5 per cent from 14.9 per cent in February. The Bureau of Labour Statistics said the economy added 4,000 more jobs in January and February than it previously reported. This year’s election is expected to hinge on the state of the economy. Obama’s re-election hopes may depend on continued improvement in the unemployment rate and job creation.
Mitt Romney, the likely Republican challenger, this week blamed the president’s policies for slow growth and high unemployment.
The Obama campaign has said that Romney would reinstate policies that led to the recession — lower taxes for the wealthy and less regulation for business.