DAVID GREENE, HOST:
On a Friday, it is MORNING EDITION, from NPR News. Good morning. I'm David Greene. Well, there has been cautious optimism about the health of the U.S. economy lately, but this morning, some disappointing news. While the unemployment rate ticked down to 7.6 percent in March, far fewer jobs were created in the month than expected. Let's bring in NPR business correspondent Yuki Noguchi.
Yuki, good morning.
YUKI NOGUCHI, BYLINE: Good morning.
GREENE: So, economists, are they scratching their heads?
NOGUCHI: Yeah. It's a very weak jobs report, especially when you compare it to the previous month. Expectations were for 200,000 net new jobs. In fact, it came in at less than half that, 88,000. And I know this sounds confusing, because the unemployment rate dropped from 7.7 to 7.6, which would seem to be a good thing. Sometimes the jobless rate drops because more people find jobs. But last month, that was not the case. It declined because nearly a half-a-million people dropped out of the labor force, meaning there were fewer people working or looking for work.
And the labor force participation rate, which has been declining since 2007, is now its lowest level since 1979, when you and I were toddlers.
GREENE: Toddlers, indeed. This seems like a reversal of fortunes. We were talking about a February jobs report that was pretty strong. I mean, is there any sort of trajectory with the job situation, or are things just going in fits and starts?
NOGUCHI: Yeah, if you compare it to the strong February we had, I mean, March definitely looks particularly bad. People dropping out of the labor force is a very bad sign. It tells the story of a very disaffected people. If you take the longer view, I think the point and the problem is that there is actually very little forward momentum - so little, in fact, that it's almost invisible to the naked eye.
I mean, the Labor Department said, for the last year, job growth has averaged 169,000 a month. Given that there's nearly 12 million people who are unemployed, or even more who are underemployed, that's pretty small potatoes.
GREENE: Well, but let's talk about how different things interact in the economy. I mean, unlike in previous years, housing has been on the upswing. And usually, we talk about housing kind of driving good news in the jobs market, you know, employment getting better. Why is that not happening?
NOGUCHI: Right. For the last three years now, we've seen this pattern where the economy comes roaring out of the gates early in the year, only to sort of trip up in the spring. And in the past, it was attributed to this weak housing sector. But this year, as you point out, things are different. Construction hiring is up, and home prices are up. And many people think that to the extent we're growing at all, it is because the housing economy is solid, while everything else is pretty weak.
GREENE: OK. If housing is solid, are there other reasons that employers are reluctant to hire people?
NOGUCHI: Well, that's been a big question for, you know, years now. Remember the days of stimulus?
NOGUCHI: That's not going to happen. Government at all levels is cutting spending. And in the private sector, money is very cheap to borrow for many businesses. But they don't always see the demand to justify hiring. So some businesses I've talked to have gotten more efficient, and so that's why they don't need to hire. Some worry about increasing costs, like the new health care law.
GREENE: New health care law, and we also have been talking a lot on this program about the sequester, these automatic federal spending cuts and the effect that they're having on government agencies, there are furloughs. I wonder, are there indications that the sequester might actually be having an impact on hiring nationwide?
NOGUCHI: Well, not yet - not yet that we can point to, anyway. The effects are expected to be felt mostly in the summer and fall. In March, the U.S. Postal Service lost 12,000 jobs. The government continues to lose jobs. That's not necessarily because of these cuts. But in coming months, government employees will get furloughed, won't be spending as much money, likely, and economists believe that this will mean less hiring. So, you know, more headwinds for the job market to come.
GREENE: That's NPR's Yuki Noguchi, talking to us about the news this morning. The unemployment rate has ticked down to 7.6 percent, but far fewer jobs were created in March than economists expected.
Yuki, thanks a lot.
NOGUCHI: Thank you. Transcript provided by NPR, Copyright NPR.