Employers added a disappointing 88,000 jobs in March, confirming fears of a slowdown in payroll growth that economists say could persist for several months. The number of new jobs is less than half what economists had forecast. The unemployment rate fell to 7.6% from 7.7%, largely because 496,000 Americans stopped working or looking for work, the Labor Department said Friday in its monthly employment report. Futures trading on Wall Street in major indexes began sinking as soon as the report was released. And investors fled to the safety of U.S. Treasury bonds, where prices soared and yields plummeted.
Former CBO director Douglas Holtz-Eakin describes the totality of the new report as "awful." Few liberal economists can muster the strength to disagree. The civilian workforce participation rate is the real story today, with nearly half-a-million Americans giving up looking for work. Perversely, this allowed the official U-3 unemployment rate to tick down by a notch, but analysts from across the spectrum recognize that result as fool's gold. The participation rate is now a paltry 63.3 percent, the lowest it's been since 1978. This is a very disappointing report, which Obama cheerleaders will try to blame on his sequester cuts -- which, in turn, they'll try to blame on Republicans. But these are pre-sequester numbers. Before the furloughs. Before any possible layoffs. Don't ask me, ask Obama's favorite economist:
"I don't think the sequester [is in these numbers] at all - Mark Zandi, then mentions Obamacare— James Pethokoukis (@JimPethokoukis) April 5, 2013
That's a double gut-punch to the White House. Their go-to "independent" economist trashes their built-in excuse, then raises the specter of Obamacare (which he's been doing for the last few months). Kevin also cited economists warning of Obamacare-related layoffs acting as a wet blanket atop our struggling "recovery." The nonpartisan CBO has estimated that Obamacare would kill 800,000 American jobs. A few more relevant tweets from Pethokoukis, whose coverage is always excellent on employment report days:
10.98%: What the unemployment rate would be if labor force participation was the same as in January 2009— James Pethokoukis (@JimPethokoukis) April 5, 2013
8.3%: What the unemployment rate would be if labor force participation was the same as in March 2012— James Pethokoukis (@JimPethokoukis) April 5, 2013
So if the participation rate had simply held steady over last year, the U-3 number would be a full six-tenths of a point higher, and well above eight percent. March's 88,000 added jobs is the lowest number we've seen in nine months. Kevin's right that at the very least, the March data indicates that the long-awaited robust recovery is still elusive. That's why markets slumped as the news broke this morning.