"We've hit a wall when it comes to the job situation"
- Nariman Behravesh, chief economist at IHS Inc.
The overall unemployment rate in the world's largest economy reached a four-year low, due to a slump in the size of the labour force, while employers hired fewer workers than forecast in March, indicating the U.S. job market is struggling to make bigger strides. Payrolls grew by 88,000 workers, posting the smallest gain in nine months, and down from a revised 268,000 February increase. Meantime, the unemployment rate tumbled to 7.6% from 7.7%, a lowest level since December 2008. However, the rate fell only because more people stopped looking for work, therefore they are no longer counted as unemployed. The slowdown is adding to signs that the U.S. economy is heading into a weak spring even despite all efforts made by the Fed.
"We've hit a wall when it comes to the job situation," said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts. "The U.S. labour market had been doing very well, but it's going back into a soft patch. One worry is that this is an early warning of the impact of the sequester, and businesses may be anticipating its full impact. It's not going to last forever, but we could see a few months of weak job numbers."
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