US economy adds just 88,000 jobs in March

The BBC's Michelle Fleury in New York says there are "plenty of reasons to be concerned"

The US economy added just 88,000 jobs in March, the lowest increase for nine months, official data has shown.

The number was much weaker than the rise of approximately 200,000 predicted by economists, and will inevitably raise new concerns about the strength of the US economic recovery.

At the same time, the US jobless rate declined to 7.6% from 7.7% in February.

A drop in retail employment was a major factor behind the disappointing rise in overall job creation.

The data from the Labor Department showed that the retail sector lost 24,000 jobs in March.

At the same time, 12,000 jobs were lost in the US Postal Service, which has been making staff redundant as it aims to cut losses.

Other sectors of the economy performed much better, with 51,000 extra professional and business services jobs being created, and 23,000 new healthcare positions.

Start Quote

When you get to numbers below 100,000, you have to start worrying”

End Quote Paul Dales Capital Economics
Government cuts

March's rise in job creation was half the level of the past six months, when there was an average monthly decline of 196,000.

Some economists expect Federal spending cuts, which came into effect on 1 March, to have had an impact on confidence among companies and the numbers of people hired.

The total number of unemployed in the US in March was 11.7 million.

For adult men, the unemployment rate was 6.9%, and 7% for women.

For teenagers of both sexes, the rate was 24.2%, almost one in four people.

"The US economy just hit a major speed bump," said Marcus Bullus, trading director at MB Capital in London.

Paul Dales, an economist at Capital Economics, was equally disappointed.

"When you get to numbers below 100,000, you have to start worrying," he said.

The US economy needs to add about 90,000 jobs each month just to keep up with population growth.

The disappointing data comes after other reports have indicated that the US economic recovery is continuing.

In recent weeks, figures have shown that US factory orders are rising strongly, and the housing market is still gaining in strength.

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