(AP) Payroll growth across the country was sluggish in March as employers added just 110,000 jobs, the fewest since July. Nevertheless, the labor market accommodated enough people to drop the unemployment rate to 5.2 percent.

The new figures, released by the Labor Department Friday, offered another mixed picture of America's hiring climate. The job market has been the sector of the economy that has been among the slowest to recover from the last recession.

"It wasn't a banner month for the average American worker. We had job growth but not enough to absorb the still large number of unemployed and underemployed people," said Mark Zandi, chief economist at Economy.com. "The job market is not in full swing."

Payroll growth, as measured by a survey of businesses, slowed in March. Job losses at factories and in the retail sector tempered gains in professional and business services, construction, education and health services and in other industries.

The 110,000 jobs added in March marked the smallest gain since last July, when payrolls grew by a tepid 83,000. March's payroll gain was half of the roughly 220,000 jobs that economists had forecast before the report was released. Job gains for February, meanwhile, were revised slightly downward to 243,000 from the initial 262,000 reported a month ago.

The civilian U.S. unemployment rate is calculated from a separate statistical survey than the payroll figures. The two statistical methods often can _ and do _ offer seemingly conflicting pictures of what is happening in the labor market.

The seasonally adjusted overall civilian unemployment rate dropped to 5.2 percent in March from 5.4 percent in February. The household survey showed that 357,000 people said they found employment last month, outpacing the number of people who couldn't find work. Thus, the fractional decrease in the overall jobless rate.

Economists tend to put more more stock in the payroll figures because they come from the much broader business survey, which is based 400,000 work sites. The survey used to calculate the unemployment rate, called the household survey, is based on 60,000 households.

Analysts believe the economy in the first three months of 2005 grew at an annual rate of 4 percent or higher, according to some projections. Economic growth probably will slow a bit in the current April-to-June quarter but should still remain at a healthy pace to spur decent job gains in the months ahead, they said.

Federal Reserve Chairman Alan Greenspan and his colleagues, meeting last week, said "labor market conditions continue to improve gradually."

Economists believe that the lackluster performance in payrolls in March reflected businesses turning somewhat more cautious in the face of high energy prices.

President Bush _ who was dogged with questions about the health of the job market throughout his first term in office _ wants to see the labor market and the overall economy thriving as he seeks to sell the American public and politicians a revamp of the Depression era Social Security program.

Fed policy-makers are feeling upbeat about the economy's growth, yet are concerned about a potential pickup in inflation. They boosted interest rates last week for the seventh time since June 2004. An additional increase to hold inflation in check is expected at the Fed's next meeting, on May 3.

Workers' average hourly earnings rose in March to $15.95, a 0.3 percent increase from the previous month. While that was slightly higher than economists were forecasting, analysts didn't believe it was a harbinger of wage inflation. They noted that hourly earning have been fairly stagnant.

For jobseekers it is still a difficult climate. There were 7.7 million people unemployed in March with the average duration of 19.5 weeks without work, the highest since November.

The share of the working-age population working or actively seeking a job in March continued to hold steady at 65.8 percent, a nearly 17-year low first reached in January.