US employers added 120,000 jobs in March

WASHINGTON: Employers in the United States added fewer jobs than forecast in March, underscoring Federal Reserve chairman Ben S. Bernanke’s concern that recent gains may not be sustained without a pickup in growth.

The 120,000 increase in payrolls, the fewest in five months, followed a revised 240,000 gain in February that was bigger than first estimated, Labour Department figures showed yesterday. The March increase was less than the most pessimistic forecast in a Bloomberg News survey, in which the median estimate called for a 205,000 rise.

Unemployment fell to 8.2%, the lowest since January 2009, from 8.3%.

Faster employment growth that leads to bigger wage gains is necessary to propel consumer spending that accounts for about 70% of the economy. Yesterday’s data showed Americans worked fewer hours and earned less on average per week, helping explain why policymakers say interest rates may need to stay low at least through late 2014.

“You’re going to see a slowing in the pace of job growth,” Neil Dutta, an economist at Bank of America Corp in New York, said before the report. “Despite the much ballyhooed recovery in the labour market, we’ve seen more jobs and yet disposable income is weaker.”

Stock index futures declined after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June falling 0.8% to 1,379 at 8.33am in New York. The yield on the benchmark 10-year Treasury note fell to 2.1% from 2.18%. Payroll estimates from 80 economists in the Bloomberg survey ranged from increases of 175,000 to 250,000 after an initially estimated 227,000 gain the prior month. Revisions added a total 4,000 jobs to payrolls in January and February.

The March data showed a 34,000 decrease in retail employment, the biggest decline since October 2009.

The unemployment rate, derived from a separate survey of households, was forecast to hold at 8.3%, according to the survey median.