The employment report for March from the U.S. Bureau of Labor Statistics is a real downer, to put it mildly. According to NPR, many analysts had expected a net growth of 200,000 jobs, down from the estimated 236,000 jobs added to private and public payrolls in February. Instead, American companies' payrolls showed a net gain of just 88,000 people last month. This is the lowest monthly gain since last June. And this grim report doesn't even reflect the full impact of job cuts due to sequestration.
The unemployment rate fell to 7.6 percent from 7.7 percent, but that's cold comfort—the unemployment rate only includes people who are still looking for work, so the slight unemployment dip paired with weak job growth simply suggests more people have given up. The labor force participation rate, which measures how many people are employed or looking for jobs, fell to 63.3%, which CNN reports is its lowest level since 1979.
“We’ve hit a wall when it comes to the job situation,” Nariman Behravesh, chief economist at IHS Inc. tells Bloomberg News. “The U.S. labor market had been doing very well, but it’s going back into a soft patch. One worry is that this is an early warning of the impact of the sequester, and businesses may be anticipating its full impact. It’s not going to last forever, but we could see a few months of weak job numbers.”
The biggest job losses were in retail. Today's report revises the numbers from January and February upward by 61,000 jobs in retail, but it also reveals that the retail sector shed 24,000 jobs in March. This suggests that companies had hired at the beginning of the year in hopes of a stronger rebound, then let people go when sales didn't live up to expectations. The payroll tax hike is believed to be another factor. "The slower hiring will certainly make people less optimistic about economic growth going forward," John Silvia, chief economist at Wells Fargo, tells CNN.
One silver lining was in the construction sector, which added 18,000 jobs in March. Attempting to put a rosy spin on the numbers, the White House also notes that March employment "rose notably in professional and business services (+51,000), education and health services (+44,000), and leisure and hospitality (+17,000)." The Obama administration also has this to say in its defense:
It is important to bear in mind that the March household and payroll surveys are the first monthly surveys to look at employment since the beginning of sequestration. While the recovery was gaining traction before sequestration took effect, these arbitrary and unnecessary cuts to government services will be a headwind in the months to come, and will cut key investments in the Nation’s future competitiveness. The Congressional Budget Office has estimated that the sequester will reduce employment by 750,000 full-time equivalent jobs by the end of the year.
House Speaker John Boehner, whose party has made it clear they would rather see government fail than enact any of Obama's policies, had this to say with a straight face: "The president's policies continue to make it harder for Americans to find work. Hundreds of thousands fled the workforce last month and unemployment remains far above what the Obama administration promised when it enacted its 'stimulus' spending plan."
