Austerity bites as US employers hired at the slowest pace in nine months in March.
Just 88,000 jobs were added last month as across-the-board federal spending cuts started, and after the government increased taxes in January.
Upwards of 200,000 extra jobs are needed each month for the US economy to grow but J.P. Morgan Senior Economist Jim Glassman said there will be weaker months: “For an economy that is only beginning to get traction I think I’d never expect job growth to be solidly in the 200,000 to 300,000 range, where I expect it will go eventually, until the economy picks up speed.”
There was some good news the job gains for January and February were revised up to show 61,000 more jobs added than previously estimated.
The unemployment rate did slip from 7.7 percent to 7.6 percent, but surveys of households show that was largely due to people dropping out of the work force.
The numbers could mean policymakers at the Federal Reserve are more confident about continuing their stimulus programme – buying government bonds with newly printed money.
Fed Chairman Ben Bernanke, who has said the labour market must show sustained improvement before monetary stimulus is eased, had voiced concern about the government spending cuts.