U.S. Job Market Takes Break After Hiring Binge

Employers added 120,000 jobs last month — half the December-February pace and well short of the 210,000 economists were expecting.

WASHINGTON (AP) — The U.S. job market took a breather in March after its best hiring stretch since the Great Recession.

Employers added 120,000 jobs last month — half the December-February pace and well short of the 210,000 economists were expecting. The unemployment rate fell from 8.3 percent in February to 8.2 percent, the lowest since January 2009, but that was largely because many Americans stopped looking for work.

Still, few economists expect hiring to fizzle in spring and summer, as it did the past two years. And they blamed seasonal factors for much of Friday's disappointing report from the Labor Department.

"We don't think this is the start of another spring dip in labor market conditions," said Paul Ashworth, chief U.S. economist with Capital Economics.

The report was also closely watched in political circles. If employers retreat on hiring, consumers could lose confidence in the economy and potentially dim President Barack Obama's re-election hopes.

Ashworth and other economists cited the weather for the latest jobs report. A warm January and February allowed construction companies and other businesses that work outdoors to hire workers a few weeks earlier than usual, effectively stealing jobs from March. It helps explain a 7,000 drop in construction jobs.

Alan Amdahl, who has run his own construction company in Sioux Falls, S.D., for three decades, said a mild winter helped contribute to a flurry of new remodeling jobs. He started hiring in January.

"Our winter didn't really exist," he said. "It's just incredible. People didn't hibernate."

Economists also say the numbers can bounce around from month to month. Consistently creating 200,000 jobs a month is tough. The economy hasn't put together four straight months of 200,000 or more new jobs since early 2000.

Economists are still encouraged by the recent hiring trend: Each month from January through March has generated an average of 212,000 jobs.

Anthony Chan, chief economist at JP Morgan Wealth Management, noted strong growth among businesses that are especially sensitive to the economy's health. Hotels and restaurants hired 39,000 workers. Manufacturers added 37,000.

The factory hiring is especially welcome. Expanding factories create more jobs at the mines that produce raw materials, in warehouses and at trucking companies.

Government jobs, which declined by an average of 22,000 a month last year, fell just 1,000 in March. An improving economy is generating tax revenue and easing budget problems at city halls and statehouses across the country.

The March slowdown brings back painful memories of what happened in mid-2010 and again in 2011, when the economy lost momentum and job growth sputtered.

Most investors didn't have the chance to deliver a verdict on the report. The stock market was closed for Good Friday. Bond markets closed early.

The job market had been on a recent roll. From December through February, the country added 734,000 jobs, an average of 245,000 each month. The only three-month stretch that was better since the recession ended was March through May 2010, when the government was hiring tens of thousands of temporary workers for the census.

Companies across the country are hiring:

— Nimble Storage, a young information technology company in San Jose, Calif., is rapidly adding staff to keep up with demand for its data storage devices. Anup Singh, the company's chief financial officer, said the explosive growth of data and the need for companies to store, analyze and deliver it is driving expansion. Nimble Storage has added 30 employees so far this year, bringing its workforce to 175. It expects to hire 70 more by the end of the year. The company is hiring engineers, sales people and customer-support staff.

— Landry & Kling Cruise Event Services in Miami, which arranges events on cruise ships, has added two workers this year and plans to hire two more. Sales are strong.

"It's like the floodgates are opening," said CEO and co-founder Joyce Kling. "There's an energy to our day now. We see a lot of leads floating through."

— IdeaPaint, a company that makes washable paint that people can use erasable markers on, has hired seven workers in the last three months. Sales have risen sharply and are expected to keep rising. So the Ashland, Mass.-based company has more plans to hire — it has 31 employees now and expects to have 40 at the end of the year.

"We just had a board meeting yesterday and agreed to become more aggressive with our hiring, with our advertising, with our investment spending. We're very confident," CEO Bob Munroe said.

The unemployment rate has dropped from 9.1 percent last August to 8.2 percent last month, the lowest since Obama's first month in the White House.

Each month, the government does one survey to learn how many jobs were created and another survey to determine the unemployment rate. Those surveys can produce results that sometimes seem to conflict.

One is called the payroll survey. It asks mostly large companies and government agencies how many people they employed during the month. This survey produced the 120,000 jobs gained last month.

The other is the household survey. Government workers ask whether the adults in a household have a job. Those who don't are asked whether they're looking for one. If they are, they're considered unemployed. If they aren't, they're not considered in the work force and aren't counted as unemployed. The household survey produces each month's unemployment rate.

Unlike the payroll survey, the household survey captures farm workers, the self-employed and people who work for new companies. It also provides a better snapshot of hiring by small businesses.

In March, the household survey showed that the number of people who say they have a job fell by 31,000 and that an even larger number of people — 164,000 — stopped looking for a job. That is why the unemployment rate dipped.

Some economists, most notably Federal Reserve Chairman Ben Bernanke, say the job market faces bigger problems than unseasonably warm weather and month-to-month volatility in the employment numbers. They say the economy isn't growing fast enough to sustain strong job growth and to push the unemployment rate down rapidly.

The economy is expected to grow 2 percent to 2.5 percent this year. Chris Jones, of TD Economics, said that is not fast enough to sustain the monthly average of 245,000 jobs created from December through February. But he does say it can support an average 200,000 new jobs a month in the April-June quarter. He expects economic growth — and job creation — to pick up in the second half of 2012.

"The last few months of aggressive employment growth were inconsistent with underlying economic fundamentals," Jones said. "March's number, while still weak, actually makes sense."


Associated Press writers Tom Krisher in Detroit, Christopher S. Rugaber and Derek Kravitz in Washington, and Joyce M. Rosenberg and Mae Anderson in New York contributed to this report.