The U.S. economy added 88,000 new jobs in March, according to preliminary data from the U.S. Department of Labor, the smallest gain in the past nine months.
The official unemployment rate fell to 7.6%. It was 7.7% the previous month.
While the data is subject to revision in subsequent months, the preliminary March numbers reflect a one-month slowing of growth in the labor market. The unemployment rate fell mostly because of low labor force participation, as an estimated 496,000 people dropped out of the workforce. The labor force participation rate now stands at 63.3%, its lowest level since May of 1979.
Reports leading up to the government’s official monthly figures disappointed economists. The monthly ADP report forecast 158,000 new jobs, led by growth in the services sector, but that was well below the 246,000 private-sector jobs created (236,000 with losses in government jobs factored in) according to February’s preliminary report.
Weekly initial unemployment claims rose by 28,000 for the week ending March 30, to a seasonally adjusted 385,000, the fourth consecutive weekly increase.
The report surprised economists who thought the labor market would build on the momentum from February’s report, which was revised upward to reflect a gain of 268,000 new jobs, up from the 236,000 initially reported. January’s figures were revised to show a gain of 148,000 jobs, up from the 119,000 preliminary figure, so it’s possible that the March figures also will be revised upward in future months.
Economists say the US. economy must create at least 150,000 new jobs each month just to keep up with changes in population and the labor market, and it must create about 250,000 jobs per month to quickly bring down the unemployment rate.
In March, the retail sector took the hardest hit, shedding 24,000 jobs. That could turn out to be a one-month fluke, as economists placed most of the blame on unseasonably cold weather. However, they also cited higher taxes and government layoffs due to the nation’s fiscal situation.
The official unemployment rate, now the lowest it has been since 2008, is the government’s “U-3” rate. The U-6 rate, which includes people who are unemployed and underemployed, dropped to 13.8% in March from 14.3% the previous month. That could also be a function of low labor force participation.
