WASHINGTON (AP) — The U.S. job market slowed in March as companies hit the brakes on hiring amid uncertainty about the economy’s growth prospects. The unemployment rate dipped, but mostly because more Americans stopped looking for work.
The Labor Department said Friday that the economy added 120,000 jobs in March, down from more than 200,000 in each of the previous three months.
The unemployment rate fell to 8.2 percent, the lowest since January 2009. But the rate dropped because fewer people searched for jobs. The official unemployment tally only includes those seeking work.
Despite the pullback in March, the economy has added 858,000 jobs since December — the best four months of hiring in two years.
A mild winter may have partially influenced the disappointing job numbers in March. January and February were unusually warm, which allowed construction firms and other companies to hire people for outdoor work several weeks earlier than usual, effectively stealing jobs from March.
But the job market might have bigger problems. Federal Reserve Chairman Ben Bernanke and other economists have warned that the economy is not growing fast enough to sustain strong job growth and tumbling unemployment.
Slower economic growth has led some analysts to scale back their forecasts for corporate profits in the January-March quarter.
Weak job growth could threaten a recent rise in consumer confidence and dent investors’ enthusiasm for stocks. It also could prove a setback for President Barack Obama’s re-election hopes.
But economists noted that it’s just one weak month after three solid gains. Many were encouraged by strong job growth at factories, hotels and restaurants — industries that reflect the health of the economy.
And government hiring was little changed in March, a positive sign after months of job cuts at the state and local level.
“We are disappointed,” said Anthony Chan, chief economist at JPMorgan Wealth Management. “But when you go inside and lift the hood, the numbers look a little better.”
Obama emphasized that the economy is still improving, if fitfully.
“It’s clear to every American that there will still be ups and downs along the way and that we’ve got a lot more work to do,” Obama said during remarks at a White House forum on women and the economy.
Treasury yields and stock futures dropped sharply after the report came out. The yield on the benchmark 10-year Treasury note fell to 2.09 percent from 2.20 percent, while Standard & Poor’s 500 index futures fell 1.1 percent to 1,374. Both were little changed in the minutes before the report was released.
Most U.S. financial markets are closed for the Good Friday holiday, and others are open for abbreviated sessions. The stock market is closed, but index futures traded for 45 minutes after the jobs report came out. U.S. government bond trading ends at noon Eastern.
The biggest hit to the job market in March was at retail stores. They shed nearly 34,000 jobs after cutting nearly 29,000 in February. Temporary help firms dropped almost 8,000 — a potentially bad sign for the job market because companies often hire temp workers before adding full timers.
But manufacturers added 37,000 jobs. Hotels and restaurants added 39,000. And business and professional services added 31,000 jobs.