Employers in the United States only added 88,000 jobs during March making it the slowest pace for adding jobs in nine months. The results of the Labor Department’s jobs report suggest a weakening in economic growth as government spending cuts and higher taxes start to take effect.
The unemployment rate in the U.S., which was released in a separate report, fell by just 0.1% to 7.6% due largely from people dropping out of the current work force.
Estimates by economists expected the payrolls of non-farm employers to increase by 200,000 in March. Analysts called the results extremely worrisome given how the stock market has rallied so strong and how much the expectations of consumers have risen with new optimism from housing and spending.
On Thursday, one consulting firm said that government cuts in jobs had not been effected yet by the sequester, though other industries that rely on contracts from the government such as defense and aerospace, have already started laying off employees and putting in place cost cutting that is self-imposed to prepare for the tightening of the federal budget.
Retailers might also be anticipating an economic slowdown in spending by consumers as more people in the U.S. notices that taxes are eating into their pay checks.
In March, payrolls in the federal government were down by 14,000 with the majority coming from the cuts made by the U.S. Postal
Service.
