Pace of Job Growth Slows in March

By Toni Vranjes

April 6, 2012

Employers created 120,000 jobs last month, a number that fell below economists’ expectations.

The unemployment rate fell from 8.3 percent to 8.2 percent, the Labor Department reported today. But the decline is actually bad news, because it reflects the fact that fewer people were searching for jobs, economist Nigel Gault wrote in a commentary. The labor force declined by 164,000 in March.

One area of strong employment growth was the manufacturing sector, which added 37,000 jobs last month. On the White House blog, President Obama’s chief economist wrote that manufacturing continues to be a “bright spot.”

“After losing millions of good manufacturing jobs in the years before and during the recession, the economy has added 466,000 manufacturing jobs in the past 25 months — the strongest growth for any 25 month period since September 1995,” wrote Alan Krueger, chair of the White House Council of Economic Advisers.

Other areas of job growth included leisure and hospitality, professional and business services, and health care.

However, much of the news in the March report was disappointing. For instance, the number of new jobs was almost 100,000 below expectations, and the workweek shrank, noted Gault, the chief U.S. economist at IHS Global Insight.

“One disappointing jobs report is not reason to panic, but it will dampen some of the optimism about the strength of the recovery this year,” Gault wrote. “Our read is that March is understating the underlying improvement in the labor market, while January and February overstated it.”

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