WASHINGTON -- The U.S. jobs report for March delivered a mixed message Friday as hiring fell to its weakest pace in nearly a year. Yet at the same time, the unemployment rate reached the lowest level in nearly a decade, 4.5 percent.
Employers added just 98,000 jobs, the Labor Department said. That was barely half the previous month's gain and a potential sign of weakening growth. Yet economists largely downplayed the drop, attributing much of it to a snowstorm that hit the Midwest and Northeast just as the government was compiling its hiring data.
The steady job market has been a pillar of a resilient U.S. economy, and most analysts expect hiring to return to a pace closer to 178,000, the average monthly job gain for the past three months and close to the monthly average for 2016.
"Aside from the payroll data, all the other underlying details are encouraging," said Tom Simons, an economist at Jefferies in New York. "People are re-entering the labor force and it looks like they're getting jobs right away. The participation rate being steady is encouraging there."
Most economists had predicted a drop-off in hiring in March after robust gains in both January and February, but the drop was worse than projected. Many said they regarded the tepid figure as likely just a blip.
"It's very premature to conclude that there's been an interruption of what has been fantastic momentum in the labor market," said Carl Tannenbaum, chief economist at Northern Trust.
The March unemployment rate was the lowest since May 2007 and down from 4.7 percent in February. The rate fell because nearly 500,000 more Americans reported finding jobs, the government said.
That result appeared to be at odds with the reported gain of only 98,000 jobs. The difference reflects a little-known aspect of the monthly jobs reports: The count of jobs and the number of people who reported being hired are compiled by two separate surveys. One surveys businesses, the other households.
The survey that counts people with jobs offered other encouraging news: The number of part-time workers who would prefer full-time work fell. So did the number for those who had stopped looking for work in the past year.
As a result, an alternative gauge of unemployment, which includes both those groups, dropped to 8.9 percent, the lowest level in more than nine years.
"Within the disappointing 98,000 net new jobs added, there seems to be a lot more going on beneath the surface and what is going beneath the surface is mostly good," said Mark Vitner, an economist at Wells Fargo.
On Capitol Hill, Republicans acknowledged the glass-half-full nature of the report. "The economy clearly should be generating higher job growth," said Rep. Pat Tiberi, R-Ohio, who is chairman of the Joint Economic Committee. "However, the unemployment rate fell to the lowest rate since before the recession."
The top Democrat on the committee, Sen. Martin Heinrich of New Mexico, ignored the new unemployment rate and focused instead on the disappointing payroll gain. "Today's jobs numbers show there are still challenges ahead that this administration must address," he said. "President [Donald] Trump promised that he would be 'the greatest jobs producer that God ever created.' Democrats on the Joint Economic Committee will hold him to this promise."
The government also revised down the job growth for January and February by a combined 38,000. And it reported that average hourly earnings rose 0.2 percent in March from February and have increased 2.7 percent over the past 12 months.
Construction companies added just 6,000 jobs in March, the fewest in seven months. Retailers, suffering from the shift to online shopping, cut 30,000 jobs. Education and health care services added the fewest jobs for that category in 15 months.
The report showed that large numbers of teenagers, women and Hispanics found jobs last month. The unemployment rate for teens dropped to 13.7 percent from 15 percent. That is the lowest teenage unemployment rate since 2001.
The economy appears to have slowed in the first three months of the year, though most economists expect a rebound in the current April-June quarter.
Consumer and business sentiment has soared since the November presidential election, but the increased optimism has yet to translate into faster growth or hiring. Consumers actually slowed their spending in January and February, when adjusted for inflation. Any such pullback tends to exert a drag because consumers account for about 70 percent of the economy.
Businesses have been ordering more high-cost manufactured goods since fall, a reflection of stepped-up investment. But those orders slipped in February and remain below levels of a year ago.
Still, some areas of the economy are humming: Developers are building more homes, with construction starts up 7.5 percent in January and February compared with a year earlier. And home sales reached their highest level in a decade in January before slipping a bit in February.
The reassuring figures in the report should keep the Federal Reserve on track to continue plans for two more interest-rate increases this year as the labor market continues to tighten, economists said.
"The Fed is going to look past the March weakness -- they're going to continue to paint a positive picture of the labor market," said Ryan Sweet, an economist at Moody's Analytics Inc. in West Chester, Pa. "The trend in job growth remains solid and the overall economy is still doing well."
Information for this article was contributed by Christopher S. Rugaber and Josh Boak of The Associated Press; by Nelson D. Schwartz of The New York Times; and by Michelle Jamrisko of Bloomberg News.
A Section on 04/08/2017