Economy adds 192,000 jobs in March; unemployment rate unchanged at 6.7 percent


People attend a job fair in Detroit. U.S. employers maintained a solid pace of hiring for a second straight month in March, further evidence of resilience in an economy that had been held back by a brutally cold winter. (Joshua Lott/Reuters)

Low-skilled workers flocked to the job market last month amid a surge in hiring, according to new data, suggesting that what has been an uneven economic recovery is finally starting to disperse its benefits more broadly.

Government data released Friday revealed that about a half-million people — most of them without a college degree — joined the labor force in March. It was the third consecutive month that the workforce has grown, and the largest expansion since 2010.

That growth represents a ray of hope for less-educated workers, who were among the hardest hit during the Great Recession. Hiring in March was particularly strong in the construction sector. The average workweek in manufacturing reached a record high, even though the industry shed 1,000 jobs.

The economy added 192,000 jobs in March after hiring slumped during winter’s deep freeze. Although more people found work, the ballooning labor force meant that the national unemployment rate remained unchanged at 6.7 percent.

“This is not a bad thing,” said Beata Caranci, deputy chief economist at TD Bank Group. “It just means the recovery is appealing to a wider group of the population that can enter the job market.”

The shifting dynamics of the U.S. labor force have been one of the biggest puzzles of the recovery. Economists were surprised last year by the rapid decline in the size of the workforce. The labor force participation rate — the percentage of the population that either has a job or is looking for one — dropped to the lowest level in 35 years. As a result, the unemployment rate fell more quickly than expected.

No one is certain what was driving the decline. Some analysts say the answer is demographics: Baby boomers are retiring, and fewer people are immigrating to the United States. If that is the catalyst, those workers are unlikely to return to the job market even if the recovery picks up.

But others favor a different explanation. They argue that many potential workers became so discouraged that they gave up the job search and were no longer counted as part of the labor force. That means that a stronger economy could entice them back into the fold.

Friday’s data help bolster the second theory. The workforce has grown by 1.3 million people this year, and about a third of them have less than a high school diploma.

The growth seemed to match the industries where jobs were created. The construction sector gained 19,000 workers, while restaurants and bars created 30,000 jobs. Although the professional and business services sector was among the biggest gainers, almost half of those jobs were temporary positions.

“It’s an overall positive report,” said Alan MacEachin, corporate economist at Navy Federal Credit Union. “The job market continues to be healthy, not robust.”

The government also increased its estimates of job growth in January to 144,000, and in February to 197,000. The revised numbers represent 37,000 more jobs than previously reported for that time period.

Many economists had hoped for an even stronger hiring snapback in March — 200,000 new jobs or more. But MacEachin said that hiring last month may have been hampered by the lingering effect of several late snowstorms. He said he expects businesses to spend the next few months making up activity lost during the winter, suggesting that hiring could rise before returning to its average pace of about 180,000 new jobs a month.

Many economists had expected the workforce to continue to shrink this year, particularly because federal benefits for people who have been unemployed for more than six months expired at the end of 2013. To receive the payments, people are required to look for a job. Economists thought that once those payments ended, people would stop searching and drop out of the workforce. Instead, Caranci said, the lack of income could be forcing other members in an unemployed person’s household to look for work.

The Obama administration used the jobs report to highlight the plight of the long-term unemployed, who account for more than one-third of people out of work. The Senate is expected to vote Monday on a measure that would restore unemployment benefits to those workers. Federal payments to those who have been unemployed six months or more expired in December, and Democrats have been seeking a way to reinstate them.

In a deal brokered by Sens. Jack Reed (D-R.I.) and Dean Heller (R-Nev.), the bill would allow retroactive payments to affected workers. It is expected to pass the Senate but faces a rocky road in the House.

“The challenges confronting the long-term unemployed are the challenges that keep me up the most at night,” Labor Secretary Thomas Perez said in an interview Friday. “We’re certainly not going to quit on them.”

Americans are flocking back to the job market amid a pickup in hiring in March that seemed to signal the economy’s deep freeze is thawing.

The Labor Department reported Friday that businesses created 192,000 jobs in March and that hiring was stronger than previously thought during the previous two months. The solid showing helped confirm that the sharp slowdown in the labor market over the winter is reversing itself with the spring.

Perhaps even more heartening, the nation’s workforce grew by half a million people in March — many of them the less-educated workers who were among the hardest hit during the Great Recession. The expansion in the labor force meant that the unemployment rate remained unchanged at 6.7 percent in March, even though more people found jobs.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.
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