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U.S. unemployment rate dips despite tepid job growth

Associated Press
April 5, 2013
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U.S. employers added just 88,000 jobs in March, the fewest in nine months and a sharp retreat after a period of improved hiring. The slowdown may signal that the economy is heading into a weak spring.

The Labor Department said Friday that the unemployment rate dipped to 7.6 percent, the lowest in four years, from 7.7 percent. But the rate fell only because more people stopped looking for work. People who are out of work are no longer counted as unemployed once they stop looking for a job.

The percentage of Americans working or looking for jobs fell to 63.3 percent in March, the lowest such figure in nearly 34 years.

The Dow Jones industrial average fell 119 points, to 14,485, as of 10:57 a.m.  It was down as much as 171 points in the early going, the worst drop for the Dow since Feb. 25.

March's job gains were less than half the average of the previous six months, when the economy added an average of 196,000 jobs a month. The government said hiring was even stronger in January and February than previously estimated. January's job growth was revised up from 119,000 to 148,000. February's was revised from 236,000 to 268,000.

Several industries cut back sharply on hiring in March. Retailers cut 24,000 jobs after averaging 32,000 in the previous three months. Manufacturers cut 3,000 jobs after adding 19,000 the previous month. Financial services shed 2,000.

The number of people either working or looking for work fell by nearly 500,000 last month. It was sharpest such drop since December 2010. And the number of Americans who said they were employed dropped nearly 210,000.

Average hourly pay rose a penny, the smallest gain in five months. Average pay is just 1.8 percent higher than a year earlier, trailing the pace of inflation, which rose 2 percent in the past 12 months.

"This is not a good report through and through," Dan Greenhaus, chief economic strategist at brokerage firm BTIG, said in a note to clients.

Economists had hoped that the bigger pay increases in recent months would continue and boost Americans' ability to spend.

Some economists said they expect a slowdown this spring, though not as severe as in the past three years.

"We don't anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the U.S. is still unable to sustain what used to be just average rates of growth," said Paul Ashworth, an economist at Capital Economics.

The decline in the work force reflects several trends, economists say: Many of those out of work become discouraged and give up on their job hunts. And as the population ages, more people are retiring.

Most analysts think the economy strengthened from January through March, helped by the pickup in hiring, a sustained recovery in housing and steady consumer spending. Consumers stepped up purchases in February and January, even after Social Security taxes increased this year.

Still, the higher taxes have reduced paychecks. And many economists say steep government spending cuts that began taking effect March 1 will slow growth in the spring and summer.

Mark Vitner, an economist at Wells Fargo Securities, thinks the economy expanded at a 3.2-percent annual rate in the first quarter. But he forecasts that growth will slow to a 2-percent annual pace in the current second quarter, and then rebound after the impact of the government spending cuts fades.

Economists expect the spending reductions will shave half a percentage point off economic growth this year. Many federal workers will experience pay cuts. And government contractors will likely cut jobs. That could also drag down overall monthly hiring.

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  1. I had read earlier this spring that Noodles & Co was going to open in the Fishers Marketplace (which is SR 37 and 131st St, not 141st St, just FYI). Any word on that? Also, do you happen to know what is being built in Carmel at Pennsylvania and Old Meridian? May just be an office building but I'm not sure.

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  3. Also wondering if there is an update on the Brockway Pub-Danny Boy restaurant/taproom that was planned for the village as well?

  4. Why does the majority get to trample on the rights of the minority? You do realize that banning gay marriage does not rid the world of gay people, right? They are still going to be around and they are still going to continue to exist. The best way to get it all out of the spotlight? LEGALIZE IT! If gay marriage is legal, they will get to stop trying to push for it and you will get to stop seeing it all over the news. Why do Christians get to decide what is moral?? Why do you get to push your religion on others? How would legalizing gay marriage expose their lifestyle to your children? By the way, their lifestyle is going to continue whether gay marriage is legalized or not. It's been legal in Canada for quite a while now and they seem to be doing just fine. What about actual rules handed down by God? What about not working on Sundays? What about obeying your parents? What about adultery? These are in the 10 Commandments, the most important of God's rules. Yet they are all perfectly legal. What about divorce? Only God is allowed to dissolve a marriage so why don't you work hard to get divorce banned? Why do you get to pick and choose the parts of the Bible you care about?

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