Disappointing U.S. job growth reported in March
Government continues to shed jobs; economists say not to give up hope
It was a major disappointment after a strong February. The United States reported a softer-than-predicted job growth for the month of March. Contrasted by the 268,000 jobs in February, March's 88,000 new jobs were a definite letdown. It was the slowest pace of growth since last June and less than half of what economists expected.
Many young Americans, discouraged by job prospects, have continued to work in entry level jobs such as waitressing while attending college, racking up college loan debt.
"The general tenor of the report underscores what our overall data have been indicating - a growing but not accelerating economy," director and chief economist at ITG Investment Research Steven Blitz.
Unemployment ticked down to 7.6 percent from 7.7 percent, but this is because many people have stopped looking for work.
Sat 63.3 percent, the labor force participation rate has not been this low since 1979, when women were less likely to be working. Discouragement about job prospects in a mediocre economy still seems to be playing a large role, economists say.
"The drop in the participation rate has been centered on younger workers," chief economist at MFR Inc., Joshua Shapiro says. "Many of whom have given up hope of finding a decent job and are instead continuing in school and racking up enormous amounts of student debt, which has contributed to the recent surge in consumer credit outstanding."
Economists cautioned not to read too much into one month's report, as the numbers will inevitably be revised.
"Remember that we've had a pattern of upward revisions," chief economist at RDQ Economics John Ryding says. He notes that the government on Friday revised January and February's net growth upward by a total of 61,000 jobs.
"Before we read too much into it, bear in mind we have at least two more cracks of the whip before the number is really finalized," he added.
Job gains for last month were concentrated in professional and business services and health care, while the government again shed workers, as it has been doing for most of the last four years.
Economists expect more government layoffs in the months ahead as the effects of Congress's across-the-board budget cuts make their way through the system. This so-called sequestration process does not seem to have appreciably affected the numbers in March though.
In the meantime, policy makers have started to publicly address deficiencies in the quality of the jobs being created by the private sector, in addition to their quantity.
"It's important to look at the types of jobs that are being created because those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery," said Federal Reserve Board member Sarah Bloom Raskin said in a recent speech.
© 2013, Distributed by NEWS CONSORTIUM.
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