U.S. Economy Adds Just 88,000 Jobs; Jobless Rate Drops Slightly

WASHINGTON (April 5, 2013)--U.S. employers added just 88,000 jobs in March, the fewest in nine months and a sharp retreat after a period of strong hiring, a reminder that the job market's path back to health will be uneven.

The U.S. Labor Department said Friday the unemployment rate dipped to 7.6 percent from 7.7 percent and while that is the lowest in four years, the rate fell only because more people stopped looking for work.

The weakness may signal that companies were worried last month about steep government spending cuts that began on March 1.

March's job gains were half the pace of the previous six months, when the economy added an average of 196,000 jobs a month.

The drop raises fears that the economy could slow after a stronger winter.

The White House said Friday's unemployment report provides more proof that the economic recovery is continuing, but at the same time, Alan Krueger, chairman of the White House Council of Economic Advisers, warned that $85 billion in spending cuts that went into effect on March 1 will be a "headwind in the months to come."

Krueger noted that Friday's report was the first since those budget reductions took effect.

The White House has insisted that the spending cuts will damage the economy.

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