U.S. Added Only 120,000 Jobs in March, Report Shows
By CHRISTINE HAUSER
Published: April 6, 2012
The United States economy added a relatively weak 120,000 jobs in March, compared with 240,000 in February, and the unemployment rate dipped to 8.2 percent from 8.3 percent, the Labor Department said on Friday.
Change in jobs,
in thousands
in thousands
Source: Bureau of Labor Statistics
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Analysts had forecast a 205,000 gain in nonfarm payrolls, according to a Bloomberg survey. The private sector added 121,000 jobs in March, compared with 233,000 in February.
Many economists had expected March to be the fourth consecutive month of solid employment growth, with the addition of more than 200,000 jobs. In the week leading up to the government report, statistics suggested that hiring was picking up pace, although with more than 12 million people unemployment remained relatively high.
“It is obviously disappointing,” said Cliff Waldman, a senior economist at MAPI, the manufacturers alliance. “This provides some pretty good evidence that part of the strength of the prior two months was probably seasonal.”
President Obama, speaking at a forum at the White House aimed at promoting jobs and other economic opportunities for women, conceded the employment situation needed improvement.
“It’s clear to every American that there will still be ups and downs along the way and that we’ve got a lot more work to do,” he said.
“No issue is more important than restoring economic security for all our families in the wake of the greatest economic crisis since the Great Depression.”
ADP, the payroll processor, reported on Wednesday that private sector employment gains reached 209,000 in March. The company’s report, which is derived from payrolls data, showed that small businesses, or those with 49 employees or less, accounted for about half of the gains. Companies in the services sector added 164,000 jobs.
On Thursday, weekly Labor Department data pointed in an encouraging direction as well. It showed that first-time filings for jobless benefits fell to 357,000 in the week that ended March 31. The four-week average, considered a better indication of the trend, was the lowest since April, 2008.
The monthly federal jobs report is one of the most widely awaited releases of data for economists and market analysts, who drill into the numbers for insight into how the recovery is unfolding.
While the stock markets in the United States and most of Europe were closed for Good Friday, limited futures trading linked to the Standard & Poor’s 500-stock index and the Dow Jones industrial average showed that both were off more than 1 percent after the numbers were released. Stock markets reopen in the United States on Monday.
On the bond market, 10-year Treasury notes briefly traded more than a point higher in price after the jobs data increased the appetite for safe-haven bonds. The yield fell to 2.09 percent, down from 2.19 percent late Thursday.
Wall Street has rallied in the first three months of this year, and the brighter job numbers had added to improvements in consumer sentiment and the outlook for the economy. Still, many economists caution that there are headwinds as oil prices rise, putting a possible damper on consumer behavior just as it is showing signs of life.
The jobs report also has implications for the financial markets because of its impact on Federal Reserve policies. Fed officials are particularly concerned about the recent rate of job growth, according to an account given on Tuesday of the central bank’s minutes from its last meeting in March. The minutes suggested that the prospect for any new measures, like asset purchases to stimulate growth, were fading. Markets fell after the release of the minutes.
Assessing the job gains over time takes on added importance because the Fed “is reaching the point where it will need to decide just how ‘full’ full employment really is,” wrote Steven Blitz, chief economist of ITG Investment Research, in a research report this week.
In other words, Mr. Blitz said, even 200,000 new jobs a month is less than what should be expected two years into a recovery. If the jobs numbers keep coming in at the levels seen in the past few months, he said, the Fed might have to consider raising interest rates.
“It is recognizing that the economy has downshifted to a different level of growth in terms of full employment, and normalizing policy sooner than they would have thought was necessary.”
Unemployment has been a focus of the presidential election campaign, and signs of sustained improvement could work in President Obama’s favor as he appeals to voters that his policies are bearing fruit. Republicans have cast his efforts as too little, too late.
Government employment has been essentially flat this year. In 2011, the government lost an average of 22,000 jobs a month.
The unemployment rate has held steady in recent months even as the number of jobs has grown, largely because more people have been joining the job search.
The portion of the overall population that was employed in March fell slightly, to 58.5 percent from 58.6 percent, noted Christine Owens, the executive director of the National Employment Law Project.
“We should not attach too much significance to one month’s numbers, especially in light of overall positive trends,” she said in a statement, “but there’s no question that the persistence of a deep jobs deficit along with low labor-force participation rates and the lopsided growth in low-wage jobs remain a cause for concern about how robust and sustainable the recovery will be.
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