The U.S. says the growth of its labor market slowed markedly last month, even as its unemployment rate edged lower to 7.6 percent.
U.S. employers had been adding about 200,000 jobs a month since late last year. But the government's Bureau of Labor Statistics said Friday that payrolls only increased by 88,000 new jobs in March, the fewest in nine months.
Last month's hiring was down sharply from the robust figure of 268,000 new jobs in February, and a signal that the U.S. recovery from its deep recession five years ago remains uneven.
The jobless rate is the lowest in four years, but the government said the rate only dropped from February's 7.7 percent level because fewer people were looking for work. The government only counts people as unemployed if they are actively looking for work.
The senior economist at one large U.S. bank, Mark Vitner of Wells Fargo, said the weak March job growth calls into question the earlier gains in hiring.
“It’s clearly disappointing, and on our trading floor you could hear the collective sigh. I mean … the air was almost sucked out of the room. Everybody was hoping for a number of about 100,000 more jobs than this and really it raises questions as to just how valid the earlier pickup was. In each of the last three years, we’ve seen stronger numbers at the start of the year and then as we’ve moved into spring it’s like the economy’s hit an air pocket. And a lot of folks get this sense of dread, that here we go again, that things haven’t gotten all that much better," said Vitner.
Vitner faulted policy-makers in Washington for failing to reach agreement on tax and spending issues, and said this is the primary reason why the U.S. economy has not steadily advanced.
“You don’t have to be overly political to say that it’s run amok. It’s just a disaster. No one has a whole lot of confidence as to what tax policy is going to be in the future, and we’ve got monster-sized deficits that don’t seem to be going away anytime soon," he said.
Another economist, Michael Hicks of Ball State University in Indiana, says it may take a decade or longer to get back to the unemployment levels seen before the financial crisis.
"I think we’re seeing the U.S. economy settling into a pattern of really poor labor market performance," said Hicks. "And despite the good news about the stock market and maybe some other, generally good news about the economy, labor markets seem to be very much stuck in a pattern of very slow growth, adding very few jobs and preserving a very large pool of unemployed."