Business
African-American unemployment drops slightly as U.S. economy adds 88,000 jobs in March
Economists say the decline in the work force reflects several trends: many of those out of work become discouraged and give up on their job hunts. And as the population ages, more people are retiring.
Most economists think the economy strengthened from January through March, helped by the pickup in hiring, a sustained recovery in housing and a more resilient consumer. Consumers stepped up purchases in February and January, even after Social Security taxes increased this year.
Still the higher taxes have reduced paychecks. And many economists say steep government spending cuts that began taking effect March 1 will slow growth in the spring and summer.
Mark Vitner, an economist at Wells Fargo Securities, thinks the economy expanded at a 3.2 percent annual rate in the first quarter. But he forecasts that growth will slow to a 2 percent annual pace in the current second quarter, and then rebound after the impact of the government spending cuts fades.
Economists expect the spending reductions will shave half a percentage point off economic growth this year. Many federal workers will experience pay cuts. And government contractors will likely cut jobs. That could also drag down overall monthly hiring.
Copyright 2013 The Associated Press
