The U.S. economy managed to create only 110,000 new jobs last month — half the expected increase — in a disappointing performance...
CHICAGO — The U.S. economy managed to create only 110,000 new jobs last month — half the expected increase — in a disappointing performance that suggested higher energy costs may be starting to take an economic toll.
“The labor market cannot seem to get in stride,” observed Economy.com’s Sophia Koropeckyj, an economist, in discussing the Labor Department’s latest monthly payroll report. “Higher outlays for energy and other raw materials last month may be reducing (employers’) willingness to take on more workers,” she said.
Although the national economy has mounted a solid recovery over the past year and continues to gain momentum, the job market has failed to keep pace. Cautious employers have remained averse to hiring new workers, even though they would normally be adding employees at a rapid clip at this point in the economic rebound.
“It seems as if it’s two steps forward, one step back when it comes to job creation,” said Joel Naroff, head of Naroff Economic Advisors.
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“We thought we had reached a point where job gains in the 200,000 or more range would be posted on a more consistent basis,” he said. “Wrong again.”
The nation needs to add about 150,000 new jobs monthly just to accommodate population growth and maintain current employment levels. In February, U.S. employment rose by a hefty 243,000 and most experts had predicted March would produce a rise of about 225,000. Instead, it yielded a discouraging 110,000.
Rep. Carolyn Maloney, D-N.Y., offered a blunt and partisan interpretation of the latest jobs report, which she said calls into question the vigor of the economic recovery: “It’s April Fools’ Day for the American worker,” Maloney contended.
In a separate and somewhat contradictory report, the Bureau of Labor Statistics said the nation’s unemployment rate declined to 5.2 percent, from February’s 5.4 percent. The unemployment rate is calculated separately, using data gathered from a survey of U.S. households.
The monthly unemployment figure is considered more volatile than the government’s jobs data, and it’s not unusual for the two statistics to show contrasting short-term trends.
Labor Secretary Elaine Chao chose to focus on the decline in the unemployment rate. “The economy has had 22 straight months of job growth,” she said, and “3.1 million jobs have been created since the uptick in job growth began in June 2003.”
Peter Morici, a professor at the University of Maryland’s Smith School of Business, argued that the unemployment rate decline “masks fundamental problems in the labor market and broader economy.”
The unemployment rate doesn’t include jobless Americans who have given up looking for a job, he noted. The number of adults who chose to leave the labor force was 170,000, he said: Employment fell before more people quit working than found jobs.
The percentage of working-age people either working or actively seeking a job held steady at a historically weak 65.8 percent
On Wall Street, investors figured that the weaker-than-expected March employment report makes it less likely that the Federal Reserve will adopt a more aggressive stance on interest rates.
The National Association of Manufacturers, for example, said yesterday’s jobs report “shows that the economy is not overheating.”
The Fed “is likely to wait and see whether this was just a hiccup or a trend,” said economist Naroff.