Hiring slowdown: US employers added just 126K jobs in March

WASHINGTON - A weakening U.S. economy spilled into the job market in March as employers added just 126,000 jobs - the fewest since December 2013 - snapping a 12-month streak of gains above 200,000.

The unemployment rate remained at 5.5 percent, the Labor Department said in its monthly report Friday.

The March jobs data raised uncertainties about the world's largest economy, which for months has been the envy of other industrialized nations for its steady, robust hiring and growth. Employers now appear wary about the economy, especially as a strong dollar has slowed U.S. exports, home sales have sputtered, and cheaper gasoline has yet to unleash more consumer spending.

Some of the weakness may prove temporary. An unseasonably cold March followed a brutal winter that slowed key sectors of the economy in many regions.

Last month's subpar job growth could make the Federal Reserve less likely to start raising interest rates from record lows in June, as some have been anticipating. The Fed could decide that the economy still needs the benefit of low borrowing costs to generate healthy growth.

Reflecting that sentiment, government bond yields fell Friday. The yield on the U.S. 10-year Treasury note dropped to 1.84 percent from 1.90 percent before the jobs report was released. U.S. stock markets were closed in observance of Good Friday.

Last month, the manufacturing, building, and government sectors all shed workers. Factories cut 1,000 jobs, snapping a 19-month hiring streak. Construction jobs also fell by 1,000, the first drop in 15 months. Hiring at restaurants plunged from February. The mining and logging sector, which includes oil drilling, lost 11,000.

Some other categories showed further gains. Health care added 22,000 workers. Professional and business services - a sector that includes lawyers, engineers, accountants, and office temps - gained 40,000.

Financial services expanded by 8,000, and retailers maintained their 12-month pace by adding 25,900.

In addition to reporting sluggish hiring for March, the government revised down its estimate of job gains in February and January by a combined 69,000.

Wage growth in March remained weak. Average hourly wages rose seven cents to $24.86 an hour. That marked a year-over-year pay increase of just 2.1 percent. But because average hours worked fell in March for the first time in 15 months, Americans actually earned less on average than they did in February. Tepid pay increases have been a drag on the economy since the recession ended nearly six years ago.

Many Americans remain out of the labor force, partly because many baby boomers are reaching retirement age.

The percentage of Americans who are either working or looking for work fell in March to 62.7 percent, tying the lowest such rate since 1978.

The economy has disproportionately added lower-paying jobs in the retail and restaurant sectors since the economic recovery began in mid-2009.