According to the U.S. Bureau of Labor Statistics report released this morning, US jobs increased by only 88,000 this past month; disappointing, to say the least, since in February, 268,000 jobs were added. The numbers released for March have been the biggest decrease in the job rate since last June. Analysts have been anticipating a slow down to occur, but the 88,000 is less then half of the consensus estimate of 200,000. Bob Brusca, chief economist of FAO Economics, said in an interview with The Daily Ticker that “88,000 is an unequivocally bad number for the month,” but “it’s also the most unreliable. This number will be revised up, don’t worry.” Its important to weigh all of the factors in the economy and not zero-in on one specific report. Here are some possible reasons explaining the slow down in March hiring:
- Payroll tax increases that occurred January 1;
- Federal spending cuts that took effect on March 1;
- Political stalemate in Washington.
Also, seasonal changes need to be considered, since Spring has exhibited a slow down in the employment rate consecutively for the past three years for various reasons, including budget battles in Washington, the European debt crisis, and the Japanese earthquake. Meanwhile, the unemployment rate dipped .1% from 7.7% to 7.6%, but this is most likely because a half million people stopped looking for work and fell out of the workforce, which takes them out of the unemployment rolls and gives the appearance of a decrease in the unemployment rate. Others are taking positions well below those they held prior because that is all they can find. There is still a lot of uncertainty as employers continue to defer hiring (effects of sequestration may be the cause) until they are comfortable with a stronger economy, and see orders or service needs increasing.
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