The unemployment rate fell a tenth of a percentage point to 8.2 percent in March but the economy added just 120,000 jobs, significantly below economists’ expectations and breaking a three-month streak of payroll growth in excess of 200,000, the Labor Department reported on Friday.
Economists surveyed by Bloomberg News expected the report to show a gain of 205,000 jobs and the unemployment rate to hold at 8.3 percent. The Labor Department revised the number of jobs added in February upward, from 227,000 to 240,000, but down in January from 284,000 to 275,000.
The news is not good for President Obama. While the focus in election years tends to be on the headline unemployment rate, the disappointing number of jobs added in March is sure to become a GOP talking point, as is the fact that 8.2 percent unemployment remains well above pre-recession levels.
Minutes from the Federal Reserve’s latest policy-setting meeting, released this week, indicated that the central bank may be stepping back from applying more stimulus to the economy through a third round of quantitative easing; a weaker jobs market may encourage the bank to take such action.
Last week, Fed Chairman Ben Bernanke said the labor market was “far from normal” and warned that although the current high levels of unemployment were largely cyclical, or due to lack of aggregate demand, they could convert into a structural problem if not addressed in a timely manner.
The number of long-term unemployed, jobless for 27 or more weeks, was basically unchanged.