WASHINGTON — A streak of robust job growth came to a halt in March, signaling that U.S. employers may have grown cautious in a fragile economy.
The gain of 88,000 jobs was the smallest in nine months. And the decline in unemployment to a four-year low of 7.6 percent was only because more people stopped looking for work and were no longer counted as unemployed.
Friday's weak jobs report from the Labor Department caught analysts by surprise and was a reminder the economic recovery is still slow, nearly four years after the Great Recession ended.
“This is not a good report through and through,” Dan Greenhaus, chief economic strategist at brokerage firm BTIG, said in a note to clients.
Economists had no single explanation for why hiring weakened sharply and broadly — from retailers and manufacturers to electronics and building materials companies. Some said deep government spending cuts that began taking effect March 1 might have contributed to the slowdown, along with higher Social Security taxes. Others raised the possibility that last month was just a pause in an improving job market.
Whatever the reasons, slower job growth will extend the Federal Reserve's policy of keeping borrowing costs at record lows.
March's job gain was less than half the average of 196,000 jobs in the previous six months, raising the prospect that for the fourth straight spring, the economy and hiring could show strength early in the year, only to weaken later. Some economists say weak hiring may persist into summer before rebounding by fall.
The percentage of working-age Americans with a job or looking for one fell to 63.3 percent in March, the lowest such figure in nearly 34 years.
Stocks plummeted after the report but narrowed their losses later in the day. The Dow Jones industrial average closed down about 41 points. Broader indexes also declined.