High gas prices may be hitting the economy right in the gut. For the month of March, the pace of new job creation was cut by more than half compared to the last several encouraging monthly reports.
According to the Labor Department just 120,000 new jobs were created in March. Over the previous three months an average of 246,000 new jobs were added. Analysts generally believe at least 200,000 new monthly jobs are necessary for the economy to expand.
Stuart Varney, business analyst at Fox News and Fox Business Network, says these disappointing numbers "suggest the recovery has stalled."
A little deeper look at the numbers reveals further troubling news – a great many Americans walked away from the workforce.
The number of America's employed or looking for a job (157.7 million) declined by 164,000 in March even though the total age eligible workforce population (242.6 million) increased by 169,000 people– a net shift in the wrong direction of 333,000 people. The effect of the shrinking size of the workforce was decline in the Labor Force Participation Rate to 63.8%, and a slight drop of the unemployment rate to 8.2%.
The skunk at the modest economic recovery party that seemed to have begun can be found at your nearest gas station. The national average price of gas has increased 18% (59 cents per gallon) in just the last 90 days. That kind of shock to the family budget and to the cost of producing and transporting goods is like putting a noose around the neck of an already chocking economy.
Worse, the full impact of the rapid rise in the cost of gas is just beginning to be manifested in the economic numbers, and the peak driving season and historically associated price increases is still a month away.