The latest US labor market report disappointed market expectations and dampened hopes for a sustained recovery of the US economy. Job growth was much weaker in March than in the previous months and as economists had anticipated. According to the Labor Department in Washington, employers added “only” 120,000 new payrolls in the last month, the smallest increase since October, while the market consensus had expected a much stronger 205,000 gain.
The weak labor report backed US central bank chairman Ben Bernanke’s recent cautious remarks about whether the labor market could sustain gains above 200,000 when economic growth is tracking a sub-par rate, keeping the door open for the Fed to provide more quantitative easing to support a still sluggish economy. While manufacturing jobs picked up in March, retail employment surprisingly fell strongly by 34,000 for the second straight month, resulting in the private services sector adding jobs at the slowest pace in seven months. Analysts claimed that the numbers probabl reflected the fading boost from unseasonably warm winter weather. Revisions added a total of 4,000 jobs to payrolls in January and February. The unemployment rate, derived from a separate survey, fell to 8.2% from 8.3% in the previous month to its lowest level since January 2009, but that was mainly because people gave up the search for work and left the labor force. However, the unemployment rate has fallen from 9.1% last August and the broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, fell to a three-year low of 14.5% in March from 14.9% in February.