The unemployment rate fell from 8.3 percent in February to 8.2 percent, the lowest since January 2009, but that was largely because many Americans stopped looking for work. Still, few economists expect hiring to fizzle in spring and summer, as it did the past two years. And they blamed seasonal factors for much of Friday's disappointing report from the Labor Department. "We don't think this is the start of another spring dip in labor market conditions," said Paul Ashworth, chief US economist with Capital Economics. The report was also closely watched in political circles. If employers retreat on hiring, consumers could lose confidence in the economy and potentially dim President Barack Obama's re-election hopes.
Economists are encouraged by the recent hiring trend: Each month from January through March has generated an average of 212,000 jobs. Anthony Chan, chief economist at JP Morgan Wealth Management, noted strong growth among businesses that are especially sensitive to the economy's health. Hotels and restaurants hired 39,000 workers. Manufacturers added 37,000. The factory hiring is especially welcome. Expanding factories create more jobs at the mines that produce raw materials, in warehouses and at trucking companies. Government jobs, which declined by an average of 22,000 a month last year, fell just 1,000 in March. An improving economy is generating tax revenue and easing budget problems at city halls and statehouses across the country.
The March slowdown brings back painful memories of what happened in mid-2010 and again in 2011, when the economy lost momentum and job growth sputtered. Most investors didn't have the chance to deliver a verdict on the report. The stock market was closed for Good Friday. Bond markets closed early. The job market had been on a recent roll. From December through February, the country added 734,000 jobs, an average of 245,000 each month. The only three-month stretch that was better since the recession ended was March through May 2010, when the government was hiring tens of thousands of temporary workers for the census. The unemployment rate has dropped from 9.1 percent last August to 8.2 percent last month, the lowest since Obama's first month in the White House.
While the number of people who say they have a job fell by 31,000 and that an even larger number of people - 164,000 - stopped looking for a job. That is why the unemployment rate dipped in the most recent month. The economy is expected to grow 2 percent to 2.5 percent this year. Chris Jones, of TD Economics, said that is not fast enough to sustain the monthly average of 245,000 jobs created from December through February. But he does say it can support an average 200,000 new jobs a month in the April-June quarter. He expects economic growth - and job creation - to pick up in the second half of 2012. "The last few months of aggressive employment growth were inconsistent with underlying economic fundamentals," Jones said. "March's number, while still weak, actually makes sense.”