After two months of stellar growth, the March jobs report delivered something of a shock as U.S. employers added only 98,000 jobs, the fewest since last May.
The sharp drop in job growth followed gains of more than 200,000 in January and February. Economists had forecast payrolls increasing 180,000 last month.
Hiring was held back by inclement weather and continued layoffs in the embattled retail sector. Construction jobs rose 6,000, the weakest gain since August, while retail payrolls fell 29,700, declining for a second straight month.
Some economists weren’t particularly concerned about the March report, noting that the unemployment rate fell to a near 10-year low of 4.5% and job growth averaged 178,000 per month in the first quarter despite last month’s stumble.
“The disappointing gain in nonfarm payrolls in March is a bit of a head fake that doesn’t reflect the underlying strength and momentum in the labor market,” Scott Anderson, chief economist at Bank of the West in San Francisco, told Reuters.
But The New York Times noted that the strong start to the year had “convinced administration officials that President Trump’s policies were paying off immediately.”
“Today’s jobs numbers show there are still challenges ahead that this administration must address,” said Senator Martin Heinrich (D-N.M.), the top Democrat on the Joint Economic Committee. “President Trump promised that he would be ‘the greatest jobs producer that God ever created.’ Democrats on the Joint Economic Committee will hold him to this promise.”
Job gains earlier in the year had been boosted by unseasonably warm temperatures, with construction and leisure and hospitality among the businesses that benefited. The snow and cold weather in many parts of the country in March “clearly took a toll on the construction sector,” the Times noted.
The U.S. Federal Reserve has said it planned to raise interest rates twice more this year but signs of a sluggish economy could affect those plans.
“This raises the stakes for the April report,” said Joshua Shapiro, chief United States economist at MFR, a research firm. “You need to see things pick up in April, or else March won’t look like [an] aberration.”