American workforce plummets amid weak job growth

(CBS News) It may be just a speed bump, but America's employers have suddenly hit the brakes on hiring. The Labor Department reported Friday the economy created only 88,000 jobs in March; it had been averaging nearly 200,000 a month.

The unemployment rate fell a tenth of a point to 7.6 percent, but that isn't good news. It dropped not because people got jobs but because a lot of folks gave up looking. The government doesn't count them as part of the workforce anymore.

"I hate the fact that I have to take unemployment or take this money from the government," said Alex Swingle. "I don't want to do that."

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Swingle, 44, lost his job as a credit analyst two-and-a-half years ago. He's one of the 4.6 million Americans who've been out of work more than six months.

"There are times when you get frustrated and just wanna throw up your hands and say, 'What am I gonna do?'" he said.

The surprisingly weak job growth in March means his search won't get any easier.

"I think what this number is really telling us is this isn't the breakout year," said economist Dean Maki of Barclays. "This is still a moderate-growth year. It's not a year we have to worry about recession, we don't think. But it isn't a very strong growth year either - another moderate year."

Maki said strength in the housing market and in auto sales has been offset in part by cuts in government spending. Job growth the previous two months was revised upwards - from 119,000 to 148,000 in January, and from 236,000 to 268,000 in February

But the number of Americans in the workforce fell by nearly half a million last month to 63 percent, the lowest level in nearly 34 years.

"That's for two reasons," said Maki. "One, some people are getting discouraged and dropping out. But we think a far bigger reason is simply the retirement of baby boomers."

Alex Swingle isn't giving up. He's now studying to be a real estate agent after failing to find work as a credit analyst.

"My 17 years of experience and my education doesn't seem to matter any more to these people," he said.

Economists warn not to read too much into one report. But they're concerned because job growth also started off strong the previous two years, only to taper off again.

  • Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"

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