Apr. 5 - Half a million U.S. workers gave up looking for work, as the U.S. economy added a mere 88,000 new jobs in March. Bobbi Rebell reports.
Getting back to work is a lot of work for many Americans.. so much so that a lot of them are throwing in the towel. The March U.S. jobs report showed half a million Americans dropped out of the workforce-a staggering number that brings the labor participation rate to about 63 percent- a level not seen since the 1970's. A lot of the workforce drop-outs are older Americans- But Societe Generale's Aneta Markowska is more worried about another group: SOUNDBITE: ANETA MARKOWSKA, ECONOMIST, SOCIETE GENERALE (ENGLISH) SAYING: "There is a significant group of young people as well who have been dropping out of the labor force. And that is a little bit more worrying because they will have to come back at some point and at some point that will put upward pressure on the unemployment rate." U.S. employers added a mere 88,000 jobs last month. Retail was hit hard- the sector lost jobs. While consumers are spending money- retailers are holding back on staffing up- fearful after a tough fourth quarter- and taking a defensive stance against tax hikes that are hitting most Americans. Budget cuts from DC are also a headwind holding back hiring. SOUNDBITE: ANETA MARKOWSKA, ECONOMIST, SOCIETE GENERALE (ENGLISH) SAYING: "Private sector employers basically got spooked by the sequester and you sort of see it in the data because the work week actually increased against expectations that it would be flat and that offset some of the weakness in the aggregate employment so overall hours were up quite nicely but it just fits with this idea that employers were uncertain because of the sequester so instead of adding to the head count which is a longer term commitment they just increased the hours." But there are bright spots in the report. J.P. Morgan's Chief Economist Anthony Chan: SOUNDBITE: ANTHONY CHAN, CHIEF ECONOMIST, J.P. MORGAN PRIVATE BANKING (ENGLISH) SAYING: "It's going to take some of the pressure off the Federal Reserve to taper off sooner than they would like. We know if the economy is growing, and I think the economy is growing, but if the economy is growing rapidly and the labor force and employment is participating, then I think the Fed will have an incentive to pullback some of that $85 billion that they are investing into the credit markets every month. Now, with this report I think they can take a breather." And in fact stocks regained most of the intraday losses by the end of Friday's session, reassured the Fed would continue its aggressive policy to support the U.S. economy.