* Nonfarm jobs rise 120,000 in March
* Private sector payrolls gain 121,000
* Unemployment rate falls to 8.2 percent from 8.3 percent
* Weak report keeps QE3 on the table
By Lucia Mutikani
WASHINGTON, April 6 U.S. payrolls rose far less
than expected in March, keeping the door open for further
monetary policy support from the Federal Reserve, even as the
unemployment rate fell to a three-year low of 8.2 percent.
Employers added 120,000 jobs last month, the Labor
Department said on Friday, the smallest increase since October.
Economists polled by Reuters had expected nonfarm employment
to increase 203,000 and the jobless rate to hold at 8.3 percent.
The slowdown in employment growth last month likely
reflected the fading boost from unseasonably warm winter
weather. It supported the caution on the labor market from Fed
Chairman Ben Bernanke last week.
Bernanke expressed doubts the recent job gains could be
sustained, and March's weak report was in line with expectations
that economic growth slowed to an annual pace of 2 percent in
the first quarter from the 3 percent rate in the
"This is going to keep the Fed in easy policy mode. They're
going to want to see a step toward 300,000 before they start to
think about seeing a stronger outlook for the economy," said
Sean Incremona, an economist at 4CAST in New York.
S&P 500 stock index futures dropped sharply after the data,
while U.S. Treasury debt prices turned higher. The dollar turned
lower versus euro.
While the unemployment rate fell to its lowest level since
January 2009, that was mainly because some people gave up the
search for work. The separate household survey, from which the
jobless rate is derived also showed a drop in employment.
The unemployment rate has fallen from 9.1 percent in August.
The weak employment gains could hurt President Barack
Obama's chances for re-election in November.
The weakness in hiring last month was concentrated in the
vast private services sector, which added only 90,000 after
increasing payrolls by 204,000 in February. Retail employment
fell dropped 33,800 after falling 28,600 the prior month.
Construction hiring fell 7,000, the second straight monthly
decline. Temporary help fell 7,500 after rising 54,900 in
However, manufacturing enjoyed another month of strong job
gains, with factories adding 37,000 new positions, helped by
carmakers trying to meet pent-up demand for motor vehicles.
Factory jobs increased by 31,000 in February.
Government employment edged down 1,000 after rising 7,000 in
February. Despite the weak employment gains last month, average
hourly earnings rose 5 cents.
The workweek dipped to 34.5 hours from 34.6 hours in