This is a terrible, horrible, no-good, very bad jobs report.

The 88,000 net jobs added in March, if that or a similar figure holds up through revisions, is a tragedy: Nearly four years into the economic recovery, with the unemployment rate still close to 8 percent, the nation recorded a month in which too few jobs were added to keep up with the growing American workforce (that number is more like 125,000). The headline read that the unemployment rate fell to 7.6 percent from 7.7 percent, but it was almost entirely for bad reasons. A whopping 496,000 people dropped out of the labor force, and 206,000 fewer people reported having a job, meaning that the proportion of Americans currently working actually ticked down, not up.

Sure, there are a couple of silver linings: Revisions to previous months’ tallies added 61,000 more added jobs in 2013, and worker pay rose 0.5 percent, with both more hours worked and higher wages. But the overall thrust is this: The economy hasn’t been as strong this year as it had appeared to be just a few days ago.

So, what is the culprit? March was the month that the policy of sequestration, across-the-board government spending cuts went into effect. But the patterns of what sectors added and lost jobs doesn’t match what you would expect if this was the major driver of the weakness. The professional and business services sector, which includes many contractors, actually added 51,000 jobs, consistent with its recent results. The federal government excluding the U.S. Postal Service shed 2,200 jobs, which amounts to a rounding error across the whole of the American labor market. It’s not that the sequester won’t have some negative effects on the economy eventually, but you have to squint awfully hard to see them in this report.

The more plausible case is that the increase in payroll taxes that took place in January, lopping 2 percent off of most workers paychecks, is damaging the retail sector. Retailers shed 24,000 jobs, with the steepest losses among sellers of building materials and garden supplies and of clothing and clothing accessories. It makes sense that it would have taken two or three months for less cash in customers' pockets to translate into retailers keeping fewer cashiers and sales clerks on staff. That said, consumer spending data and reports from retailers themselves has held up reasonably well in 2013 despite the payroll tax, so it’s hard to assign too much confidence the idea that the drop in retail jobs is a consequence of fiscal austerity as opposed to a routine statistical blip.

Which leaves us with this overarching conclusion: This economy isn’t as strong as we thought it was.  What had seemed to be a nice winter acceleration in activity may be, as it has been for the last three years, undermined by a spring-summer swoon.

There are big implications there for policy. In the last few days, some key Fed officials have said they could envision starting to taper off the central bank’s $85 billion a month bond buying program this summer. When even the likes of Vice-chair Janet Yellen and San Francisco Fed President John Williams, two of the most dovish members of the Fed’s policy committee (that is, most worried about jobs relative to fearing inflation), it’s a sign that the great taper could be near.

The new report will have to make they, and the rest of the Fed policymakers, rethink their views. If the job market can’t maintain even three straight months of solid progress, then there will be much more reluctance at the Fed to take their foot off the accelerator of quantitative easing, even by a little bit. Bond markets priced exactly that expectation in on Friday, as interest rates fell on Treasuries, reflecting a sense that a weak job market means the Fed will keep its QE policies in place longer given a weak job market than they would have otherwise.

But while the Fed's easing may provide some cushion, there are no two ways about it: In an economy that needs some seriously robust job growth, and seemed to be starting to get it just a few weeks ago, it may be back to the drawing board.