Updated (11:30am EST): The Bureau of Labor Statistics reports the economy added 88,000 jobs last month, falling below analyst expectations. The unemployment rate ticked down to 7.6 percent from 7.7 percent.
“There was a lot of volatility in certain areas like construction and the retail sector,” says Julia Coronado, chief economist with the investment bank BNP Paribas. “[They] were very, very strong in February and then were very, very weak in March.”
Chris Low, chief economist with FTN Financial, believes the sequester may have something to do with the slowdown in job growth.
“The jobless claims from two weeks ago rose more in Virginia than another other state — the state most sensitive to the sequester,” says Low, adding that private companies may be getting ready to pare back on hiring in the next few months.
Seth Harris, acting U.S. Secretary of Labor, agrees.
“The sequestration didn’t help, when you are trying to get your car to go faster it doesn’t make sense to step on the break,” Harris says. “It is an indication of the economy as a whole needing the government to be a catalyst rather than a barrier.”
Harris says raising the minimum wage, investing in infrastructure, and increasing job training could be that catalyst.
March’s report also revealed a continuing trend that troubles economists: a decrease in workforce participation — the number of people working and looking for jobs. Though the unemployment rate fell, much of the decline came from workers leaving the labor force.
“As our labor force ages, older workers tend to participate in the work place less than do younger workers,” Harris says. “But also, part of it is because the labor market is facing a lot of challenges and so some number of workers are giving up.”
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