Employers hired fewer workers than forecast in March and a slump in the size of the labor force pushed the jobless rate down to a four-year low, indicating the U.S. job market is struggling to make bigger strides.
Payrolls grew by 88,000 workers last month, the smallest in nine months, after a revised 268,000 gain in February that was higher than first estimated, Labor Department figures showed today in Washington. The median forecast of 87 economists surveyed by Bloomberg projected an advance of 190,000. The jobless rate fell to 7.6 percent from 7.7 percent.
Tempered hiring plans suggest companies are confident in their ability to meet demand with the existing workforce as federal budget cuts cloud the economic outlook. The absence of sustained and bigger gains in employment and earnings underscores the Federal Reserve’s view that more progress is needed before record monetary policy stimulus can be scaled back.
“Hiring is still weak overall,” Scott Anderson, chief economist at Bank of the West in San Francisco, said before the report. “We could see some improvement in the economy in the second half but not enough to move the needle on payroll growth. The Fed will remain fully accommodative through the end of the year.”
The unemployment rate, derived from a separate survey of households, was forecast to hold at 7.7 percent, according to the Bloomberg survey median. The figure, the lowest since December 2008, reflected a 496,000 decline in the size of the labor force.
The labor force participation rate fell to 63.3 percent, the lowest since May 1979.
The payroll figure reflected a drop in factory employment and the biggest decline at retail trade since February 2012.
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