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Unemployment rate drops to 7.6% as more people drop out of workforce; employers add only 88K jobs

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By Thomas Olson
Friday, April 5, 2013, 8:57 a.m.

The nation's unemployment rate dipped to 7.6 percent in March because frustrated workers — the most in at least three decades — stopped looking for jobs and didn't get counted as unemployed, the government said.

The Labor Department reported on Friday that the nation's employers added a disappointing 88,000 jobs in March, about half the monthly average over the previous 12 months.

“More people would be in the labor force if job opportunities were stronger,” said Heidi Shierholz, an economist at the Economic Policy Institute in Washington.

The unemployment rate declined from 7.7 percent in February, the report said. It was 8.4 percent in March 2012.

The main reason for the lower jobless rate was the 496,000 people who dropped out of the labor force in March. A decline in the labor force, which includes people working or seeking jobs, makes the ratio of joblessness appear healthier.

“I'm pretty much fed up after knocking on doors for so long and hearing ‘no' all the time,” said Mike Bryson, 62, of the North Side, who gave up his job search about a month ago.

Bryson, who holds a degree in computer information management, hasn't held a full-time job since his layoff from a light manufacturing/assembly position in 2005.

As baby boomers age, more of them naturally leave the labor force by retiring. But 4 million people of prime working age — 25 to 54 — are dropping out of the labor force, according to Congressional Budget Office estimates.

“If they were in the labor force but without jobs, the unemployment rate would be 9.8 percent,” said Shierholz.

A telling gauge of the job market's health is the “labor force participation” rate, or percentage of adults working or actively looking for work. That rate slid to 63.3 percent in March, down from 63.5 percent in February, and 63.6 percent a year ago.

“This is a very disconcerting figure,” said Arne Kalleberg, professor of sociology and labor expert at the University of North Carolina at Chapel Hill.

“The labor force participation rate hasn't been this low since 1978 during the Carter administration,” said Kalleberg, author of “Good Jobs, Bad Jobs.”

The 88,000 new jobs in March marked the fewest gained monthly since June, when employers added 87,000 jobs.

“We need about 140,000 new jobs a month just to keep up with population growth,” said Antony Davies, associate professor of economics at Duquesne University.

Last month's new jobs compared with an average 169,000 in the prior 12 months, and an average 168,000 in the past three months.

So, although March “does not a trend make,” said Shierholz, it does mean “we're not getting any kind of growth that will dig us out of the hole we're in.”

New private-sector jobs came from construction, a sector that posted a surprisingly healthy 18,000 jobs last month, marking gains for the 10th month running.

Business and professional services added 51,000 jobs, and education and health services added 44,000. Manufacturing jobs declined by 3,000, the first downturn in that segment since September.

A net loss of 7,000 jobs in the government sector included a 12,000 decline in jobs at the Postal Service last month.

But don't blame the federal sequester, said economists.

Much of the budget cutbacks take the form of government employees rolling back to four-day work weeks, which does not show up in unemployment figures. Shierholz said the “full impact” of the sequester probably won't happen until late summer.

The number of jobless people in the country declined to 11.7 million last month, from 12 million the month earlier.

The nation still has many fewer jobs than in December 2007, when the recession began. The recession, which officially ended in July 2009, eliminated 8.7 million jobs. Since mid-2009, 5.7 million jobs have returned, leaving the economy 3 million short.

Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at

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