What Went Wrong in the March Jobs Report?

The economy created just 126,000 new positions in March—barely half the predicted total—and the sinking price of oil may be to blame.

Lucy Nicholson/Reuters

March came in like a job-creating lion and left like, well, some sort of severely disappointing animal. In numbers released Friday morning, the Bureau of Labor Statistics found that the economy created just 126,000 jobs. That's barely half of the 248,000 predicted by economists. It's the first time in a year there haven't been at least 200,000 new jobs for a month.

And adding insult to injury, it looks like the great numbers in January and February weren't as good as they seemed, either—the totals from those two months were revised down by a total of 69,000 jobs too. The unemployment rate stayed steady at 5.5 percent, but labor-force participation continues to tank.

There's a technical economic term to describe this: "oof."

As this chart from the White House shows, things are still way better than they were immediately after the recession, but the straightforwardly upward growth many economists had hoped for after the last few reports isn't quite there:

Private Sector Jobs, Seasonally Adjusted
Bureau of Labor Statistics/White House

So what happened? One possible culprit is oil prices. Consumers might love seeing their gas expenses shrink, but there's a tradeoff, and that's in weakness in the job market. Mining, which includes the oil industry in the BLS's count, lost 11,000 jobs in March, and is down 30,000 for the year. Supporting services for extraction have also been hit hard.

If you're looking hard enough for good news, you can find a little in hourly wage growth, which has been one of the weaker indicators even as the economy has piled on jobs in recent months. Hourly wages grew 0.3 percent, which isn't huge, but it did beat the predicted 0.2 percent, and is movement in the right direction.

Is there any hope for a boost from Washington? In a statement on the numbers, Jason Furman, head of President Obama's Council of Economic Advisers, restated the president's calls for infrastructure spending and eliminating budget sequestration, both of which have fallen on deaf ears in Congress. Speaker John Boehner pointed the finger the other way. "The House continues focusing on Americans’ top priorities, passing bill after bill to fuel stronger growth and help the economy create more jobs," he said in a statement. "President Obama has done nothing but stand in the way, most recently vetoing a measure that would protect the rights of small businesses and workers."

This means that, as usual, attention will return to the Federal Reserve. The Fed has been expected to raise interest rates soon, and despite indications of softness in the first quarter, Chairwoman Janet Yellen has sounded sanguine. The question is whether she and the other governors will still feel optimistic after Friday's report.