The U.S. economy continued its roller-coaster ride of jobs growth, with just 88,000 new jobs added in March — a sharp drop from the robust 268,000 added in February.
Even more alarming, the March numbers came before the $85 billion in federal budget cuts from sequestration began to be felt across the country.
The 88,000 number was far less than economists expected for March.
The pullback in March “reinforces our view that the estimated 3.5 percent real growth in the first quarter is not likely to be sustained,” Kathy Bosjancic, director of macroeconomic analysis at the Conference Board, said to the Financial Times. “Instead, we see the overall economy, led by the consumer, downshifting significantly in the second quarter, struggling to get close to 1 percent real growth.”
“This is the poorest U.S. jobs growth in nine months and threatens to repeat the pattern of the last couple of years in which a spurt in job creation is short lived,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.
The loss of government jobs was just 7,000, indicating that the budget cuts hadn’t yet taken effect. In the private sector, manufacturing lost 3,000 jobs while retail lost 24,000. There was good news in the housing sector, as an acceleration in construction added 18,000 more jobs in March.
“For a long time construction employment growth lagged behind housing starts and the revival in construction was not helping, but this is starting to change,” said Paul Diggle, property economist at Capital Economics.
But of the overall numbers, Matthew Shay, president of the National Retail Federation, said, “This is far from a wake-up call. It is an urgent plea for help by Americans and the businesses that employ them for policy makers to stop pointing fingers and to start implementing policies that encourage job growth and capital investment.”
But naturally there was considerable finger pointing in response to the numbers, with Republicans quick to blame President Obama.
“The president’s policies continue to make it harder for Americans to find work,” said John Boehner, House speaker. “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.”
But Alan Krueger, chairman of the White House council of economic advisers, said the data showed the need for “more work to be done” and pointed out that the March report was first since automatic budget cuts took effect. He warned that this would keep having a negative impact on the labor market.
“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,” Krueger warned.