“There had been some talk that maybe the Fed might start to stop being so accommodative,” says John Silvia, chief economist at Wells Fargo in Charlotte, N.C. “This number will temper that view: The Fed’s policies will remain in place.”
Although sequestration, the forced reductions in federal spending, is taking place, it is still too early to see the impact of that policy, economists say.
In the March report, federal government jobs declined by 14,000. Of those, 12,000 were attributed to reductions in the US Postal Service, which were not part of sequestration.
Although some federal agencies announced plans to furlough workers in advance of the actual implementation of sequestration, most are not beginning the reductions in hours until this month.
“We would have seen the effect of sequestration in a reduction of hours worked, but those did not go down,” Mr. Canally says.
The average workweek in terms of hours rose last month by 0.1 hours, to 34.6 hours worked per week, according to the BLS.
The report continues a recurring trend of the last few years, Mr. Silvia says: Businesses are optimistic starting the year, hire lots of workers, and then become more conservative by spring.
“We’ve had this trend of the second quarter starting out weaker for the last five or six years,” he says.
In an analysis released Friday, IHS Global Insight, an economic forecasting firm based in Lexington, Mass., projected that the economy grew by 3.8 percent in the first quarter. But the firm expects only 0.4 percent growth in the second quarter.