The labor force participation rate dropped 0.2 percentage points to 63.3 percent, the Bureau of Labor Statistics reported Friday. This is the lowest rate in 34 years. Meanwhile, the total civilian labor force is down 496,000 in March.
Employment growth is slowing
The BLS also reported that a small number (88,000) of those unemployed are now working, keeping the number of unemployed persons, at 11.7 million and the unemployment rate basically unchanged at 7.6 percent. This was the slowest growth in nine months.
People finding jobs in accounting and health care
The most job growth occurred in accounting and bookkeeping services and home health care.
Some blame government spending cuts
Fox News opined, “Some companies were worried last month about steep government spending cuts. Economists say the decline in the work force reflects several trends: many of those out of work become discouraged and give up on their job hunts. And as the population ages, more people are retiring.”
While it is unusual that employers would base their hiring plans on the decline of the rate of increased government spending, other news sources attributed this opinion to the economists. ABC News said, “Many economists say steep government spending cuts that began taking effect March 1 will slow growth in the spring and summer.” NBC News said, “And many economists say $85 billion in automatic government spending cuts will slow growth in the spring and summer.”
It may be too soon to tell
Edward Lazear said in the Wall Street Journal not to jump to conclusions, “The initial (unemployment) reports are often inaccurate and don't say anything useful about where the economy is heading.”
Other sources confirm slow growth
Outplacement firm Challenger, Gray & Christmas said Thursday that cut 49,255 jobs in March. Society for Human Resource Management on Thursday projected April’s 2013 hiring rate will drop slightly in manufacturing and increase sharply in services compared with April 2012. This is consistent with what the BLS said happened in March.
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