Snap Analysis: Even the drop in March's jobless rate is bad news
WASHINGTON (Reuters) - American employers hit the brakes on hiring last month, and even a drop in the unemployment rate looked concerning because of a sharp drop in the size of the workforce.
U.S. employers added just 120,000 people to payrolls last month and the unemployment rate eased lower to 8.2 percent, the Labor Department said on Friday.
The slowdown in payroll additions was lower than even the most pessimistic forecast in a Reuters poll.
Following are some key details from the report:
* The fall in the unemployment rate was actually a bad sign for the economy. The jobless rate dropped because workers were exiting the workforce, possibly because they were discouraged at job prospects although some likely were retiring as well. The workforce shrank by 164,000 people. The participation rate, which is the percent of the population in the workforce, fell to 63.8 percent from 63.9 percent in February. Like the jobless rate, the participation rate is derived from the household survey, while the main payroll jobs measure is from a survey of employers.
* However, in a sign not all workers leaving the workforce did so because of discouragement, the Labor Department's broader U-6 measure of unemployment, which includes people who want a job but haven't looked in the last month and part-time workers who want to work full time, fell to 14.5 percent from 14.9 percent. That takes a bit of the edge off the fall in the participation rate.
* It's not clear how much weather may have played a role in the slowdown in hiring. Jobs in construction shrank by 7,000, marking the second straight month of losses. That boosts the view that some of the increase in hiring during the mild winter might lead to a pullback in during the spring. Retail jobs also took a big hit, shrinking by 33,800. At the same time, there were some signs that mild weather in March continued to help employment. The number of people with jobs but who weren't working because of bad weather was only 96,000. That was the lowest reading for a March since 2000.
* Casting another shadow over the outlook for hiring, the length of the average work week fell to 34.5 hours from 34.6 hours. That suggests employers might be able to squeeze a bit more out of their existing staff, leaving them less likely to hire in the future.
* Also boding poorly for future hiring, employers cut hiring of temporary workers. Employers cut 7,500 temps last month. Companies often hire temps to test the waters before adding people directly to their payrolls. The water appeared to be on the cold side in March.
(Reporting by Jason Lange)